Far East Square v Yau Lee Construction: SOPA & SIA Contract - Final Certificate Effect
Far East Square Pte Ltd, the appellant, appealed against the decision of the High Court in favor of Yau Lee Construction (Singapore) Pte Ltd, the respondent, concerning an adjudication determination under the Building and Construction Industry Security of Payment Act (SOPA). The Court of Appeal allowed the appeal, holding that once a final certificate has been issued by the architect under the Singapore Institute of Architects (SIA) Form of Contract, no further payment claims can be submitted. The court found that the adjudication proceedings were void and the employer was not estopped from challenging the adjudication determination.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal on SOPA application after final certificate issuance under SIA contract. Court held no further claims permissible, reversing lower court.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Far East Square Pte Ltd | Appellant | Corporation | Appeal Allowed | Won | |
| Yau Lee Construction (Singapore) Pte Ltd | Respondent | Corporation | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Steven Chong | Justice of the Court of Appeal | Yes |
| Quentin Loh | Judge | No |
4. Counsels
4. Facts
- Far East Square Pte Ltd engaged Yau Lee Construction as the main contractor for a project.
- The contract incorporated the SIA Form of Contract.
- The final phase of works was completed on 6 May 2014.
- The maintenance period lasted from 6 May 2014 to 5 August 2015.
- Yau Lee submitted 18 payment claims between 16 November 2015 and 23 July 2017.
- The Architect issued the Maintenance Certificate on 4 August 2017.
- Yau Lee submitted payment claim number 73 on 23 August 2017.
- The Architect issued the Final Certificate on 5 September 2017.
- Yau Lee submitted payment claim number 75 on 24 November 2017, after the Final Certificate was issued.
- Far East did not issue a payment response to PC 75.
- Yau Lee lodged adjudication application SOP/AA 406 of 2017 in relation to PC 75.
- The Adjudicator found Far East liable to pay Yau Lee $2,276,284.68.
5. Formal Citations
- Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte Ltd, Civil Appeal No 204 of 2018, [2019] SGCA 36
- Yau Lee Construction (Singapore) Pte Ltd v Far East Square Pte Ltd, , [2018] SGHC 261
6. Timeline
| Date | Event |
|---|---|
| Letter of Award issued to Yau Lee Construction | |
| Final phase of works completed | |
| Maintenance period began | |
| Maintenance period ended | |
| Yau Lee submitted 18 payment claims | |
| Yau Lee submitted 18 payment claims | |
| Architect issued the Maintenance Certificate | |
| Yau Lee submitted payment claim number 73 | |
| Architect issued the Final Certificate | |
| Far East issued a payment response to Yau Lee entitled “Payment Response Reference Number 73 (Final)” | |
| Yau Lee responded with a letter that same day, stating that they disagreed with the response amount contained in PR 73 | |
| Yau Lee submitted payment claim number 74 | |
| Architect wrote to inform Yau Lee that since the final payment claim had to be submitted before the end of the maintenance period and Yau Lee had failed to do so, it had proceeded to issue the Final Certificate within three months from the issue of the Maintenance Certificate in accordance with cl 31(12)(a) of the SIA Conditions of Contract | |
| Yau Lee submitted payment claim number 75 | |
| Yau Lee lodged adjudication application SOP/AA 406 of 2017 in relation to PC 75 | |
| Far East duly filed its adjudication response | |
| Adjudication determination was issued | |
| Appeal heard and allowed | |
| Yau Lee filed Originating Summons No 258 of 2018 to enforce the Adjudication Determination | |
| Far East filed Summons No 1455 of 2018 for the Adjudication Determination to be set aside | |
| Appeal allowed with brief oral grounds | |
| Full grounds issued |
7. Legal Issues
- Validity of Payment Claims after Final Certificate
- Outcome: Court held that payment claims submitted after the issuance of the final certificate are outside the ambit of the SOPA.
- Category: Substantive
- Sub-Issues:
- Architect's functus officio status
- Condition precedent to payment
- SOPA applicability
- Estoppel and Duty to Speak
- Outcome: Court held that the duty to speak does not extend to payment claims that are outside the purview of the SOPA from the outset.
- Category: Procedural
- Sub-Issues:
- Failure to file payment response
- Jurisdictional objections
- Waiver of rights
- Patent Error
- Outcome: Court found that the payment claim submitted after the architect became functus officio constituted a patent error.
- Category: Procedural
- Sub-Issues:
- Obvious error in material
- Adjudicator's duty to consider merits
- Setting aside adjudication determination
8. Remedies Sought
- Monetary Damages
- Enforcement of Adjudication Determination
- Setting aside of Adjudication Determination
9. Cause of Actions
- Breach of Contract
- Claim for payment
10. Practice Areas
- Construction Law
- Commercial Litigation
- Arbitration
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 317 | Singapore | Established the duty to speak by way of a payment response in fully spelling out objections under the SOPA. |
| Yau Lee Construction (Singapore) Pte Ltd v Far East Square Pte Ltd | High Court | Yes | [2018] SGHC 261 | Singapore | Decision below which was reversed on appeal; applied Audi Construction to jurisdictional objections after final certificate issuance. |
| Comfort Management Pte Ltd v OGSP Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 979 | Singapore | Defined 'patent error' in the context of adjudication determinations. |
| W Y Steel Construction Pte Ltd v Osko Pte Ltd | Court of Appeal | Yes | [2013] 3 SLR 380 | Singapore | Cited for the purpose of the SOPA to facilitate cash flow in the construction industry by establishing a fast and low cost adjudication system to resolve payment disputes |
| Chin Ivan v H P Construction & Engineering Pte Ltd | Court of Appeal | Yes | [2015] 3 SLR 124 | Singapore | Explained the role of the architect and the architect’s certificate under the SIA Form of Contract. |
| Aoki Corp v Lippoland (Singapore) Pte Ltd | High Court | Yes | [1995] 1 SLR(R) 314 | Singapore | Cited to support the requirement that the Architect must exercise his own professional judgment when issuing a certificate |
| Grouteam Pte Ltd v UES Holdings Pte Ltd | Court of Appeal | Yes | [2016] 5 SLR 1011 | Singapore | Cited as authority for the proposition that pursuant to s 10(4) of the SOPA, repeat claims are permissible as long as they have not been adjudicated upon on the merits. |
| Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal | Court of Appeal | Yes | [2013] 1 SLR 401 | Singapore | Cited to support the proposition that even if the mandatory force of a contractual term prevents a payment claim from being made outside the contractually stipulated period, no harm would be caused to the claimant because the claimant could still include the undetermined payment claim in a fresh payment claim by virtue of s 10(4). |
| Lau Fook Hoong Adam v GTH Engineering & Construction Pte Ltd | Court of Appeal | Yes | [2015] 4 SLR 615 | Singapore | Cited for the proposition that no further payment claims should be submitted after the final payment claim as this would defeat the final nature of the final payment claim and accounting process |
| Sito Construction Pte Ltd (trading as Afone International) v PBT Engineering Pte Ltd | High Court | Yes | [2019] SGHC 7 | Singapore | Discussed in relation to the duty to speak and jurisdictional objections, but distinguished. |
| Kingsford Construction Pte Ltd v A Deli Construction Pte Ltd | High Court | Yes | [2017] SGHC 174 | Singapore | Illustrated an example of a patent error where “the documentary evidence submitted by the claimant plainly contradict[s] the claimed amount” |
13. Applicable Rules
| Rule Name |
|---|
| Order 95, Rule 2 of the Rules of Court (Cap. 322, Rule 5) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building and Construction Industry Security of Payment Act (Cap. 30B) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Building and Construction Industry Security of Payment Act
- Singapore Institute of Architects Form of Contract
- Final Certificate
- Payment Claim
- Payment Response
- Adjudication Determination
- Functus Officio
- Duty to Speak
- Patent Error
- Progress Payment
- Maintenance Certificate
15.2 Keywords
- SOPA
- SIA Form of Contract
- Final Certificate
- Payment Claim
- Adjudication
- Construction Law
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Building and Construction Contracts | 90 |
| Construction Law | 90 |
| Architects and Engineers Liability | 70 |
| Arbitration | 50 |
| Civil Procedure | 30 |
16. Subjects
- Construction Dispute
- Arbitration
- Contract Law
- Adjudication
- Civil Procedure