TT International Ltd v Ho Lee Construction: Loss of Profits, Construction Contract Termination & Waiver

In TT International Limited v Ho Lee Construction Private Limited, the High Court of Singapore addressed a claim by Ho Lee Construction for loss of profits following the termination of their construction contract by TT International. The court, presided over by Justice Quentin Loh, ruled that Ho Lee Construction was not entitled to recover loss of profits for uncompleted work under the contract's termination clause but could recover a 15% margin on certain costs. The court also dismissed arguments of issue estoppel, abuse of process, and waiver by estoppel.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

The Defendant is not entitled to recover for loss of profits on the uncompleted parts of the works. However, it is entitled to recover a 15% margin on the costs under the heads in cl 1.1(q)(i) and (ii) in lieu of, inter alia, loss of profits.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court case between TT International and Ho Lee Construction regarding loss of profits claim after contract termination.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
TT International LimitedPlaintiffCorporationClaim partially dismissedPartial
Ho Lee Construction Private LimitedDefendantCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Quentin LohJudgeYes

4. Counsels

Counsel NameOrganization
Ong Pei ChinWongPartnership LLP
Chan Hock KengWongPartnership LLP
Lawrence Foo Xian YaoWongPartnership LLP
Poonaam Bai d/o Ramakrishnan GnanasekaranEldan Law LLP
Edwin Lee Peng KhoonEldan Law LLP
Lawrence Tan Shien LoonEldan Law LLP
Jasmine Chan Ying KeetEldan Law LLP

4. Facts

  1. TT International terminated Ho Lee Construction's employment under a construction contract.
  2. The contract incorporated the Public Sector Standard Conditions of Contract for Construction Works (PSSCOC).
  3. Ho Lee Construction filed a Proof of Debt in a scheme of arrangement, including a claim for loss of profits.
  4. The Scheme Manager rejected part of Ho Lee Construction’s claim, leading to a dispute.
  5. The Court of Appeal sanctioned the scheme and directed that the Defendant’s loss of profits claim should be ascribed an amount of S$9.27 million for the purposes of voting.
  6. The main issue was whether Ho Lee Construction could recover loss of profits on uncompleted work after termination.
  7. The Plaintiff argued that the contract clause exhaustively set out recoverable sums, excluding loss of profits.
  8. The Defendant argued that the contract clause did not bar recovery for loss of profits.

5. Formal Citations

  1. TT International Limited v Ho Lee Construction Private Limited, Originating Summons No 1249 of 2010, [2017] SGHC 62

6. Timeline

DateEvent
Plaintiff obtained a Warehouse Retail Scheme licence from the Economic Development Board.
Defendant began works under the Main Contract.
Superintending Officer instructed the Defendant to suspend most of the works for the Project.
Superintending Officer instructed the Defendant to suspend all works except for certain works.
Superintending Officer instructed the Defendant to suspend all works until further notice.
Plaintiff froze repayments of all debts due to its creditors except for debts due to its essential trade creditors.
Plaintiff sent a Notice of Termination to the Defendant, terminating the Defendant’s employment under the Main Contract.
Defendant submitted a claim to the Superintending Officer for the sum of $68,139,652.94.
Superintending Officer suspended its services for the Project.
Plaintiff obtained approval from the High Court to convene a meeting of its creditors to vote on the Scheme.
Plaintiff requested Northcroft Lim Consultants Pte Ltd to assist in evaluating the claim.
Northcroft requested the Defendant to submit its claim.
Northcroft provided an assessment of the claim.
Defendant submitted the Proof of Debt for the sum of $84,563,154.14.
Scheme Manager notified the Defendant that it had rejected the Defendant’s claim in part (admitting $22,769,729.15).
Defendant requested the Plaintiff to commence proceedings in the High Court for adjudication of the Disputed Amount.
PricewaterhouseCoopers produced a report which stated that there was an absence of supporting documents in respect of, inter alia, the loss of profits claim in the Proof of Debt.
High Court sanctioned the Scheme.
Court of Appeal allowed the appeals and set aside the High Court’s sanction of the Scheme.
Further meeting of the scheme creditors was held.
Court of Appeal sanctioned the scheme subject to some alterations.
Court of Appeal directed that the Defendant’s loss of profits claim should be ascribed an amount of S$9.27 million for the purposes of voting.
Defendant requested the Plaintiff to start proceedings in the High Court for adjudication of the Disputed Amount.
Plaintiff filed this Originating Summons.
Parties reached agreement on several items of claim in relation to the Disputed Amount following mediation.
Plaintiff filed a summons, with the Defendant’s consent, for the trial of two preliminary points of law which pertained to the Damages Issue and the Interest Issue respectively.
Summons heard regarding preliminary points of law.
Parties reached an agreement on the Damages Issue.
Trial for the Loss of Profits issue began.
Quantum Issue determined by finding that the loss of profits due to the Defendant, on the assumption that cl 31.4 did not apply, was $18,193,000 rounded to the nearest thousand.
Plaintiff requested for decision on the cl 31.4 Issue.
Judgment reserved.

7. Legal Issues

  1. Interpretation of contract clause regarding loss of profits
    • Outcome: The court held that the contract clause did not allow the contractor to recover loss of profits for uncompleted work upon termination.
    • Category: Substantive
  2. Issue estoppel
    • Outcome: The court held that the Plaintiff was not barred by issue estoppel from relying on the contract clause.
    • Category: Procedural
  3. Abuse of process
    • Outcome: The court held that it was not an abuse of process for the Plaintiff to raise its argument on the contract clause in these proceedings.
    • Category: Procedural
  4. Waiver by estoppel
    • Outcome: The court held that the Plaintiff did not waive its right to rely on the contract clause.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Construction Dispute
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re TT International LtdHigh CourtYes[2010] SGHC 177SingaporeCited for the High Court's decision on the sanction of the Scheme of Arrangement and the determination of Ho Lee Construction’s claims against the Company.
The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appealCourt of AppealYes[2012] 2 SLR 213SingaporeCited for the Court of Appeal’s decision to allow the appeals, set aside the High Court’s sanction of the Scheme, and direct a further meeting of the scheme creditors.
GEC Marconi Systems Pty Limited v BHP Information Technology Pty LimitedFederal CourtYes[2003] FCA 50AustraliaCited obiter for the proposition that a termination for convenience clause would be subject to a duty of good faith.
TSG Building Services Plc v South Anglia Housing LimitedEnglish High CourtYes[2013] EWHC 1151 (TCC)England and WalesCited for holding that a termination for convenience clause was not subject to a duty of good faith.
Pinckney v United StatesUnited States Court of Federal ClaimsYes88 Fed Cl 490United States of AmericaCited to show that damages for a termination for convenience are limited to costs incurred prior to termination, a reasonable profit on work performed, and certain additional costs associated with termination.
Lombard North Central Plc v ButterworthQueen's BenchYes[1987] QB 257England and WalesCited as authority for the principle that if a contract is terminated pursuant to a contractual termination clause, the innocent party may recover loss of bargain damages if there is a concurrent repudiation of the contract.
Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd and Another and Another AppealCourt of AppealYes[2009] 2 SLR 814SingaporeCited for the elements of issue estoppel.
Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan No 301High CourtYes[2005] 3 SLR(R) 157SingaporeCited for the requirements of issue estoppel.
Goh Nellie v Goh Lian TeckHigh CourtYes[2007] 1 SLR 453SingaporeCited for clarifying the concept of finality in the context of issue estoppel and the principles guiding a court in determining whether there is an abuse of process.
Henderson v HendersonCourt of ChanceryYes[1843-60] All ER Rep 378England and WalesCited for encapsulating the doctrine of abuse of process.
Aero-Gate Pte Ltd v Engen Marine Engineering Pte LtdHigh CourtYes[2013] 4 SLR 409SingaporeCited for the elements of waiver by estoppel.
Evergreat Construction Co Pte Ltd v Presscrete Engineering Pte LtdHigh CourtYes[2006] 1 SLR(R) 634SingaporeCited for summarizing the prevention principle.
Walter Lilly and Company Ltd v Giles Patrick Cyril Mackay and DMW Developments LtdTechnology and Construction CourtYes[2012] EWHC 1773 (TCC)England and WalesCited as an important court decision on what amounts to loss and expense under the JCT Standard Form.

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

15. Key Terms and Keywords

15.1 Key Terms

  • Termination for Convenience
  • Loss of Profits
  • Scheme of Arrangement
  • Public Sector Standard Conditions of Contract
  • Issue Estoppel
  • Abuse of Process
  • Waiver by Estoppel
  • Superintending Officer
  • Proof of Debt
  • Disputed Amount

15.2 Keywords

  • Construction Contract
  • Termination
  • Loss of Profits
  • Singapore
  • Building and Construction Law
  • Waiver
  • Estoppel

17. Areas of Law

Area NameRelevance Score
Construction Law90
Breach of Contract70
Contract Law70
Abuse of Process50
Res Judicata50
Estoppel50

16. Subjects

  • Construction Law
  • Contract Law
  • Civil Procedure
  • Insolvency Law