ICOP CONSTRUCTION (SG) PTE. LTD. v TIONG SENG CIVIL ENGINEERING (PRIVATE) LIMITED
19 cases cited
(15 SG, 4 foreign)
Catchwords
Practice Areas
Counsel (9)
Allen & Gledhill LLP Firm Bird & Bird ATMD LLP Firm Adly Rizal bin Said Counsel Appellant Gladys Yeo Li Min Counsel Appellant Ho Chien Mien Counsel Respondent Lee Wei Han Shaun Counsel Appellant Ng Khim Loong Mark Counsel Appellant Ng Wei Ying Counsel Respondent Yew Kai Ning Sophia Counsel Respondent
Case Significance
ICOP Construction (SG) Pte Ltd v Tiong Seng Civil Engineering (Pte) Ltd [2024] SGHC(A) 1 was a decision of the Appellate Division of the High Court in Civil Appeal No 100 of 2022, heard on 26 May 2023 before Woo Bih Li JAD, Kannan Ramesh JAD and Quentin Loh SJ, with Quentin Loh SJ delivering the reserved judgment of the court on 2 January 2024. The appeal arose from a construction dispute between ICOP Construction (SG) Pte Ltd, a subcontractor for microtunneling works, and the main contractor, Tiong Seng Civil Engineering (Private) Limited.
The judgment records that the trial below in HC/S 1086/2019 was bifurcated, and that the appeal arose from the judge's decision on the first tranche dealing with liability of ICOP's claims and TSCE's counterclaims. The judge below had ordered TSCE to pay ICOP $1,333,298.52, and ICOP to pay TSCE $402,790.46 for delay damages, and found that ICOP had wrongfully terminated the subcontract, with TSCE's loss and damage for wrongful termination to proceed to the second tranche where damages would be assessed. The catchwords address damages, performance bonds, termination, and employers' and contractors' duties in building and construction law. Bird & Bird ATMD LLP acted for the appellant and Allen & Gledhill LLP for the respondent.
Summary
SUPREME COURT OF SINGAPORE
2 January 2024
Case summary
ICOP Construction (SG) Pte Ltd v Tiong Seng Civil Engineering (Pte) Ltd [2024] SGHC(A) 1
Appellate Division – Civil Appeal No 100 of 2022
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Decision of the Appellate Division of the High Court (delivered by Quentin Loh SJ):
Outcome: The appeal was allowed in part. Of the thirteen issues that arose in the appeal, the appellant’s appeal on ten issues was dismissed. The appeal was allowed in respect of: (a) the quantum of damages awarded by the judge below (the “Judge”) to the appellant in respect of the respondent’s delays in obtaining approvals from the authorities for the project; (b) the Judge’s decision not to award the costs of renting a microtunnel boring machine to the appellant as a component of its delay damages; and (c) the Judge’s decision to award liquidated rather than general damages to the respondent for delays caused by the appellant.
Pertinent and significant points of the judgment:
• In technical disputes such as the present appeal, the Court would hold parties strictly to their pleadings: at [45] and [215].
• In claims for delay damages, a party, in its pleadings, may choose to adopt an itemised approach and specify the duration of delay for each delay event. If it chooses such an approach, it must ensure that the delay caused by each pleaded delay event adds up to the total days of delay that it claims. Alternatively, a party may make a global or composite delay claim that does not ascribe a specific number of delays of the total delay to each delay event. However, this approach comes with its own risk and evidentiary challenges. Parties would be bound by their chosen approach: at [214] and [215]
• In the absence of an extension of time clause in a construction contract, an act of prevention by the employer will render any liquidated damages clause inoperative and time would be set at large. The contractor must then complete the project within a reasonable time, failing which it may be liable for general damages for delay: at [128] and [236].
Background to the appeal
1 The appellant, ICOP Construction (SG) Pte Ltd (“ICOP”), is in the business of constructing pipelines. The respondent, Tiong Seng Civil Engineering (Pte) Ltd (“TSCE”), is in the business of constructing civil engineering projects. TSCE was engaged in a project to construct a potable water pipeline from Ayer Rajah Expressway/Henderson Road to River Valley Road. TSCE entered into a subcontract with ICOP (the “Subcontract”), for the latter to install pipes for the project through microtunnelling (the “Subcontract Works”).
2 The Subcontract envisaged that ICOP would install the pipes in four sequential “drives” or sections. In each drive, ICOP’s microtunnel boring machine (the “MTBM”) would move along the proposed depth of the tunnel, from a launching shaft to a receiving shaft. The MTBM’s cutter head would bore into the soil, creating a tunnel for the proposed pipeline. Prefabricated pipes would be added behind the cutter head’s trailing steel cylinder at appropriate junctures, simultaneously constructing the pipe as the cutter head progressed through the ground.
3 Owing to delays on the part of both parties, the Subcontract Works were substantially delayed. Various disagreements arose between the parties, and following ICOP’s completion of the second drive in early 2019, ICOP terminated the Subcontract on 13 March 2019.
4 In the first tranche of a bifurcated trial, the judge below (the “Judge”) ordered TSCE to pay ICOP $1,333,298.52, and ICOP to pay TSCE $402,790.46 in delay damages. The Judge also found that ICOP had wrongfully terminated the Subcontract. TSCE’s loss and damage for ICOP’s wrongful termination of the Subcontract will proceed to the second tranche of the trial where damages will be assessed.
5 The present appeal was ICOP’s appeal against the Judge’s decision in the first tranche. The appeal raised thirteen issues. The Court dismissed ICOP’s appeals in respect of most of the issues, save for the Authority Approvals’ issue, the MTBM rental costs issue, and the liquidated damages issue (which are discussed below at paras 16 to 29). This summary sets out the parties’ arguments and the Court’s decision by issue.
Parties’ cases and the Court’s decision
The headwall issue
6 The first issue related to the headwall of Shaft P5-2 (ie, the launching shaft for the second drive), which was reconstructed by TSCE following ICOP’s request. The Judge found that this reconstruction gave rise to 49 days of delay. The issue was whether the Judge erred in finding ICOP liable to pay TSCE $83,790 in damages for this delay event, for the reason that ICOP lacked a valid legal basis to request the reconstruction of the headwall (the “headwall issue”).
7 The Judge found that the headwall’s initial construction had complied with the specifications of the Qualified Person for Design (“QP(D)”), and rejected ICOP’s submission that there were specifications that the headwall had to be able to withstand 1.75 bar of pressure.
8 ICOP’s appeal in respect of the headwall issue was dismissed. The Court affirmed the Judge’s reasons. In technical disputes like the present, parties would be bound strictly to their pleadings. Contrary to ICOP’s pleaded case, the QP(D)’s specifications, as reflected in approved drawings, did not include such a requirement: at [31], [34]–[35] and [45].
9 While references to 1.75 bar of pressure could be found in the Method Statement (a part of the Subcontract) and Geological Longitudinal Section sheets submitted by the QP(D) to the authorities, these did not form part of the QP(D)’s specifications in relation to the headwall. They related instead to the “face pressure” that the MTBM’s cutter head was expected to experience during the tunnelling process: at [36]–[45].
The shaft defects issue
10 The second issue related to the alleged defects in Shaft P5-1 (ie, the receiving shaft for the second drive). In its pleadings, ICOP averred that TSCE had breached its contractual and/or tortious duty to ensure that Shaft P5-1 had an interior wall to wall working space of 7.5m that was free from any protruding objects. ICOP claimed that there was a pipe cap and end valve protruding in Shaft P5-1 which had reduced the working space within the shaft. As a result, ICOP had to incur time and costs in dismantling the MTBM to be able to retrieve it (the “shaft defects issue”).
11 In its closing submissions below, ICOP further argued that TSCE had also failed to account for a subterranean 400kV cable joint bay when it provided the initial tunnel alignment to ICOP. This necessitated changes to the alignment of the second drive which further reduced the working space in Shaft P5-1 (the “misalignment issue”). ICOP argued that the misalignment issue, together with the shaft defects issue, resulted in ICOP’s inability to retrieve the MTBM in one piece.
12 The Judge found that TSCE was not under any contractual obligation or tortious duty to ensure that ICOP had 7.5m of “working space” in Shaft P5-1 — the Subcontract only required TSCE to ensure that the internal diameter of Shaft P5-1 was at least 7.5m, which TSCE had complied with. Furthermore, the misalignment issue was not pleaded by ICOP, and ICOP was disallowed from relying on the misalignment. On appeal, ICOP argued that the Judge erred in: (a) rejecting the alleged contractual term, whether express or implied, and (b) not considering the unpleaded misalignment issue.
13 ICOP’s appeal in respect of the shaft defects issue was dismissed. The Subcontract required TSCE to build Shaft P5-1 with a minimum “internal diameter” of 7.5m. This pertained only to the shaft’s physical dimensions, and could not be interpreted to mean “working space” or to require the shaft to be “free from protruding objects”: at [76].
14 Such a term also could not be implied as there was no gap in the Subcontract. There was also no evidence of industry standards that supported ICOP’s interpretation: at [77].
15 The Judge was correct in rejecting ICOP’s unpleaded misalignment point. Allowing ICOP to rely on the point now would cause irreparable prejudice to TSCE: at [80]–[85].
The delayed handover and mobilisation issue (and the Authority Approvals’ issue)
16 The third issue was whether the Judge erred in finding that TSCE did not cause any critical delay between 24 February 2018 and 5 April 2018. ICOP alleged that TSCE’s handover of Shaft P5-2 had been delayed: this should have been done by 24 February 2018, but ICOP only gained unfettered access to the shaft on 6 April 2018. TSCE alleged that ICOP’s mobilisation of its equipment was slow: even after the site was handed over, ICOP’s primary generator and MTBM only arrived on site on 27 April 2018 (the “delayed handover and mobilisation issue”).
17 The Judge found that neither of these fell on the critical path, as ICOP still could not have commenced pipe jacking works until TSCE finally obtained the necessary approvals from the authorities (the “Authorities’ Approvals”). Under the applicable baseline programme, the Authorities’ Approvals were to be obtained by 6 April 2018 (for the MTBM’s scheduled launch), but were only finally obtained on 25 June 2018. He thus found TSCE liable for 69 working days of delay for the period of 6 April 2018 to 25 June 2018 (the “Authorities’ Approvals issue”).
18 On appeal, ICOP submitted that the Judge erred in not considering the critical delays prior to 6 April 2018. Relying on two work programmes that differed from what the Judge found to be the applicable baseline programme, ICOP argued that TSCE was required to obtain the Authorities’ Approvals even before Shaft P5-2 was to be handed over. The Authorities’ Approvals issue was thus the delay event that was first in time. Following the case of Saga Cruises BDF Ltd v Fincantieri SPA [2016] EWHC 1875 (Comm) (“Saga Cruises”), as between concurrent causes of delay, the event that is first in time or that caused the delay first should be treated as causing the critical delay. TSCE disagreed with ICOP’s reliance on the alternative work programmes. It also submitted that Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 Con LR 33 (“Malmaison”) and not Saga Cruises should be followed. Malmaison stood for the proposition that in cases involving concurrent causes to a delay, a contractor cannot recover damages (but only an extension of time) where the employer’s delay event would have delayed completion even in the absence of the contractor’s delay.
19 As for the Authorities’ Approvals issue, ICOP submitted that the Judge had made an error in the daily rates used to compute the quantum of damages.
20 ICOP’s appeal in respect of the delayed handover and mobilisation issue was dismissed. The Judge’s finding on the applicable baseline programme for the project was correct. The alternative programmes relied on by ICOP had been drafted more than a year before TSCE issued the notice to proceed for the second drive; under the Subcontract, parties envisaged that the schedule of works would depend on the notice to proceed being issued. In any event, even if TSCE had planned to obtain the Authorities’ Approvals before they handed over the worksite to ICOP, this would not have caused any critical delay until 6 April 2018, which is when the MTBM was scheduled for launch and when the approvals would be required: at [95]–[99].
21 The debate between the “first-in-time approach” in Saga Cruises and the Malmaison approach was irrelevant. It was meaningless to speak of concurrent causes to a delay when the delay in question was not on the critical path: at [100]–[102].
22 In determining the quantum of general damages payable by TSCE for the 69 working day delay between 6 April 2018 and 25 June 2018 (ie, the Authorities’ Approvals issue), the Judge erred in using daily rates computed on a calendar day basis instead of a working day basis. The sum of $401,338.47 in damages assessed by the Judge was revised to $489,064.89, which was the figure agreed to by the parties: at [103]–[104].
The MTBM rental costs issue
23 The fourth issue was whether the Judge erred in finding that ICOP is not entitled to claim the rental expenses for the MTBM as a component of delay damages, in light of an 18-month minimum rental period undertaken by ICOP to a third party in the MTBM lease agreement (the “MTBM rental costs issue”).
24 On appeal, ICOP submitted that it was entitled to claim the rental costs for the MTBM as: (a) damages on a reliance basis, on the footing that it lawfully terminated the Subcontract; or (b) delay damages, whether on an expectation or reliance basis or in restitution. TSCE submitted that: (a) ICOP was not entitled to reliance damages because ICOP would have recovered the rental costs through TSCE’s progress payments; and (b) ICOP had not shown that TSCE’s delays would have led to the 18-month period being overrun.
25 ICOP’s appeal in respect of the MTBM rental costs issue was allowed. The legal basis of delay damages is well established. A claim for delay damages is usually founded on a breach of an express loss and expense clause, but such damages are also recoverable under common law for breach of contract by the party that causes the delay, subject to the usual rules on causation, mitigation and remoteness of damage. Such expense arises naturally from the breach, which prevents the innocent party from carrying out its work when it is able and willing to do so, prolonging the contract period and adding to that party’s costs. The claim for MTBM rental costs is a classic case of delay damages, no different from the other standby costs awarded by the Judge: at [115]–[117].
26 The fact that ICOP undertook a minimum rental period with a third party was an irrelevant consideration because the loss is to be assessed in relation to how much it cost ICOP per day to have its MTBM idle and not carry out any tunnelling and pipe laying works. ICOP would only have been able to use the MTBM for other purposes after the end of its project with TSCE, which had been delayed: at [118]–[122].
27 ICOP was entitled to recover its MTBM rental cost of $9,120 per day, the rate agreed by the experts, but only for a reduced period of 28 working days from 22 May to 25 June 2018. Delay damages were meant to compensate ICOP for the standby or idling costs it suffered as a result of TSCE’s delay in obtaining the Authorities’ Approvals. In this regard, the evidence showed that ICOP was only ready to commence pipe jacking on 22 May 2018, owing to its delayed mobilisation, testing and commissioning of the MTBM. It was awarded a total of $255,360 for the MTBM rental costs: at [123]–[126].
The liquidated damages issue
28 The fifth issue was whether the Judge erred in finding that TSCE is entitled to claim liquidated damages for ICOP’s delays as opposed to general damages (the “liquidated damages issue”). In respect of ICOP’s delays (ie, 49 days for the headwall issue, 31.137 days for the noise restriction issue, 22.86 days for the slow pipe jacking issue, and 21 days for the slow demobilisation issue), the Judge had awarded a total of $212,034.87 in liquidated damages. ICOP submits that the Judge should have awarded general damages instead, since the Subcontract lacked an extension of time clause.
29 ICOP’s appeal in respect of the liquidated damages issue was allowed. It was settled law that, where TSCE committed an act of prevention and there was no power to extend time for that act under the Subcontract, the liquidated damages clause in the Subcontract would be unenforceable and time was set at large. The Judge’s award of $212,034.87 in liquidated damages was set aside, and applying the parties’ agreed rates for general damages, TSCE was awarded $60,965.16 in general damages for the delays attributable to ICOP: at [128]–[131].
The noise restriction issue
30 The sixth issue was whether the Judge erred in finding ICOP liable to pay TSCE $54,244.27 in damages for 31.137 days of delay for failing to comply with noise restrictions so that pipe jacking works could be carried out at night (the “noise restriction issue”). Delays occurred because ICOP could not work in two ten-hour shifts each day from Monday to Saturday. The National Environment Agency (“NEA”) had initially granted TSCE’s application for ICOP to work at night, but this permit was cancelled on or around 11 September 2018 as the site exceeded permitted noise levels.
31 ICOP’s case was that TSCE had failed to meet its contractual obligation to obtain permits for ICOP to carry out the Subcontract Works without restriction as to noise. Both parties blamed the other for failing to mitigate noise, such that the permit was cancelled. The Judge disagreed that TSCE was to obtain such a permit, and found that ICOP, in failing to sufficiently mitigate noise, caused 31.137 calendar days of delay.
32 On appeal, ICOP maintained its case that TSCE was to obtain a permit without restriction as to noise, that TSCE failed to obtain such a permit and to mitigate noise, and that this justified TSCE being liable for causing 55.25 (rather than 31.137) days of delay.
33 ICOP’s appeal in respect of the noise restriction issue was dismissed. The purported obligation to obtain a permit for ICOP to work without restriction as to noise was both unpleaded and unsubstantiated. Such a permit was also legally unsustainable in light of the Environmental Protection and Management (Control of Noise at Construction Sites) Regulations (2008 Rev Ed), which impose noise levels for construction works as a matter of law and which regulations are not unknown to the construction industry: at [141]–[152].
34 As the Subcontract was silent on who should take noise prevention or abatement measures, both ICOP and TSCE were obliged to ensure that the equipment they respectively supplied and the construction activity they respectively carried out did not generate noise that breached the statutory noise limits: at [153] and [159]–[165].
35 It was unsatisfactory that parties did not attempt to present a proper analysis or expert evidence to identify the contributors or sources of noise, to measure their levels or to quantify the mitigating effect of measures that they claimed had been carried out: at [148] and [173]–[175].
36 It was ICOP’s failure to mitigate noise that led to the permit’s cancellation. ICOP’s case was hinged on NEA’s decision of 3 December 2018 to allow night works to continue, which on ICOP’s submission showed that ICOP’s noise mitigation efforts had been satisfactory. However, NEA’s approval of 3 December 2018 was only probationary, and not a confirmation that noise levels had been successfully reduced; indeed, parties continued to face difficulties in keeping noise within permitted levels after 3 December 2018. On the available evidence, ICOP contributed substantially to the noise generated on site (eg, through its 1100kVA generator), and it failed to take timely and effective mitigation measures. ICOP also failed to show that TSCE’s noise mitigation measures were inadequate: [172] and [176]–[189].
37 As to ICOP’s submission that TSCE ought to have been liable for 55.25 calendar days of delay rather than the 31.137 days found by the Judge, the Court agreed with the Judge’s decision to prefer the calculations of TSCE’s delay expert, Mr Widdowson, in arriving at 31.137 days of delay: at [191] and [203]–[208].
The four additional delay events issue
38 The seventh issue was whether the Judge erred in finding that TSCE did not cause any delay by: (a) failing to supply a sufficient number of pipes; (b) supplying poor-quality pipes; (c) failing to timeously carry out waste disposal; or (d) insisting on an unplanned cutter head inspection (the “four additional delay events issue”). ICOP’s pleaded case was that TSCE had caused 158 working days of delay, but the individual lengths of delay for the headwall issue, the delayed handover issue, the Authorities’ Approvals issue, and the noise restriction issue already added up to 158 working days, leaving no room for the four additional delay events listed above.
39 On appeal, ICOP maintained that it was sufficient for it to have pleaded the four delay events in its statement of claim, leaving the length of delay attributable to each event for submission and/or evidence.
40 ICOP’s appeal in respect of the four additional delay events issue was dismissed. Parties in technical disputes are to be held closely to their pleadings. Since ICOP had chosen to adopt an itemised treatment of each head of delay, it had to ensure that the delay caused by each pleaded delay event added up to the total days of delay that it claimed against TSCE: at [214]–[218].
41 Instead of adopting an itemised treatment of each head of delay, a party is entitled to make a global or composite delay claim that does not ascribe a specific number of delays of the total delay to each delay event. However, this approach comes with its own risk and evidentiary challenges. Parties would be bound by their chosen approach: at [214]–[215].
The slow pipe jacking issue
42 The eighth issue was whether the Judge erred in finding ICOP liable to pay TSCE $39,090.60 in damages for 22.86 days of delay on the basis that ICOP’s pipe jacking works were slow (the “slow pipe jacking issue”). On appeal, ICOP argued that these 22.86 days of delay were not caused by slow pipe jacking works, but ICOP’s inability to work round-the-clock due to the noise restrictions.
43 ICOP’s appeal in respect of the slow pipe jacking issue was dismissed. In attributing 22.86 working days of delay to this event, the Judge had already factored in the effect of noise restrictions on ICOP’s productivity. There was no double counting, and ICOP did not suggest on appeal that the Judge’s methodology had been incorrect: at [222]–[223].
The slow demobilisation issue
44 The ninth issue was whether the Judge erred in finding ICOP liable to pay TSCE $35,910 in damages for causing 21 days of delay in relation to its slow demobilisation after the second drive (the “slow demobilisation issue”). On appeal, ICOP argued that these 21 days of delay were not caused by slow demobilisation, but ICOP’s inability to work round-the-clock due to the noise restrictions, TSCE’s liability for the shaft defects issue, and TSCE’s supply of poor-quality pipes.
45 ICOP’s appeal in respect of the slow demobilisation issue was dismissed. This issue hinged on the Court resolving the noise restriction issue, the shaft defects issue, and the issue with TSCE’s alleged supply of poor-quality pipes (under the four additional delay events issue) in ICOP’s favour. As ICOP’s appeal on these issues was dismissed, it followed that its appeal on the slow demobilisation issue failed: at [228]–[234].
The reasonable time for completion issue
46 The tenth issue was whether the Judge erred in not considering what a reasonable time to complete the second drive was (the “reasonable time for completion issue”). ICOP argued that the Judge should not have simply undertaken an arithmetical exercise by adding TSCE’s delays to the date of completion without considering other factors.
47 ICOP’s appeal in respect of the reasonable time for completion issue was dismissed. Although the Judge did not expressly state his finding on what the reasonable time was for ICOP to complete the project, he made findings on the parties’ respective liabilities for each individual delay event and added the effect of TSCE’s delay to the contractual deadline for the second drive. ICOP did not explain what other factors the Judge ought to have taken into account: at [236]–[242].
The termination issue
48 The eleventh issue was whether the Judge erred in finding that ICOP did not lawfully terminate the Subcontract on 13 March 2019 (the “termination issue”). When it purported to terminate the Subcontract, ICOP had relied on the Subcontract’s termination clause, which provided that “[i]n case ICOP has fulfilled its obligation under the contract and can for reasons which are beyond the control of ICOP not start or continue with the work in a timely manner, ICOP shall have the right to terminate the work and rendering of services”. Before the Judge, ICOP argued that it was prevented from continuing with its work in a timely manner due to: (a) NEA’s decision to stop night works; and (b) TSCE’s delays in preparing for the third drive.
49 The Judge found that ICOP was not entitled to terminate the Subcontract, given his findings on the noise restriction issue, and given that the Subcontract Works had earlier been substantially delayed by ICOP’s own actions. In any case, ICOP’s delays also meant that it had not “fulfilled its obligation under the contract”.
50 On appeal, ICOP maintained that it was entitled to rely on the termination clause. It submitted that the requirement that “ICOP has fulfilled its obligation under the contract” (which the judgment termed the “Performance Requirement”) entailed that if ICOP had completed the earlier drives, then any prior delays caused then, particularly de minimis delays or delays that no longer impacted the project’s critical path, should not deprive it of its right to terminate. On the facts, ICOP had completed the first two drives before terminating the Subcontract.
51 According to ICOP, the restrictions on night works and TSCE’s delays in preparing for the third drive also meant that ICOP “can for reasons which are beyond the control of ICOP not start or continue with the work in a timely manner” (which the judgment termed the “Prevention Requirement”).
52 ICOP also raised additional matters on appeal to justify its termination, and appeared to rely on an additional ground for termination, namely that TSCE had repudiated the Subcontract by deliberately and wrongfully withholding certified payments.
53 ICOP’s appeal in respect of the termination issue was dismissed. In so far as ICOP was relying on TSCE’s withholding of progress payments as a repudiatory breach of the Subcontract, ICOP’s pleaded case and contemporaneous conduct had based its entitlement on the contractual termination clause and not a repudiatory breach by TSCE. There was also no evidence that the non-payments were of such severity as to amount to a repudiation of the Subcontract: at [256]–[262].
54 ICOP did not satisfy the Performance Requirement under the termination clause. ICOP erroneously relied on cases that concerned when a party might lose its right to terminate under common law, but those cases were of limited assistance in construing the Performance Requirement under the Subcontract’s termination clause. ICOP’s suggestion that “spent” breaches could be ignored was inconsistent with the parties’ contractual arrangements, which was a single contract contemplating a continuous stream of works, wherein individual drives had no legal significance. On the facts, ICOP’s delays also could not be considered minor delays or delays that no longer impacted the project’s critical path: at [271]–[283].
55 ICOP did not satisfy the Prevention Requirement under the termination clause for two reasons. First, it was still possible for ICOP to “continue with the work in a timely manner”. Where TSCE’s alleged delays in preparing for the third drive were concerned, these were not shown to conclusively lie on the critical path. In any case, the delay caused was only for a period of 16 days: at [291]–[299].
56 The second reason why ICOP did not satisfy the Prevention Requirement was that its purported inability to continue with the work in a timely manner was not due to reasons “beyond [its] control”. This was an integral link that went unaddressed in ICOP’s arguments. ICOP contributed to the project’s delays. Moreover, ICOP’s decision to remove and keep its MTBM in Malaysia was entirely within its control. On the evidence, ICOP intended not to return the MTBM to the worksite or continue with the works: at [300]–[305].
The performance bond issue
57 The twelfth issue was whether TSCE was justified in calling on a performance bond after ICOP purported to terminate the Subcontract, and whether ICOP was entitled to the return of the sum of $570,000 that it paid under the performance bond (the “performance bond issue”).
58 ICOP’s appeal in respect of the performance bond issue was dismissed. ICOP’s appeal on this point was predicated on it showing that it had validly terminated the Subcontract and that TSCE’s counterclaims for delay damages were without merit. Given that ICOP’s appeals on the termination issue, the slow pipe jacking issue and the slow demobilisation issue were dismissed, it followed that ICOP’s appeal in relation to the performance bond issue also failed: at [309]–[310].
The payment stay issue
59 The thirteenth and final issue was whether a stay on payments that the Judge had ordered ought to be lifted (the “payment stay issue”). The Judge had granted a stay on the execution of sums awarded in ICOP’s favour pending the second tranche of the suit.
60 On appeal, ICOP argued that the second tranche would be rendered otiose if the Court decided in the appeal that ICOP had lawfully terminated the Subcontract. Accordingly, any stay on execution ought to be lifted. In the alternative, net payment was likely to be in ICOP’s favour even after the second tranche.
61 ICOP’s appeal in respect of the payment stay issue was dismissed. ICOP had not formally appealed against the Judge’s grant of a stay in its notice of appeal. It also did not show that the Judge’s exercise of discretion was plainly wrong. The Court agreed with the Judge that it remained plausible that the net award would be in TSCE’s favour following the second tranche, and that ICOP had not shown why an award of interest would not adequately address its concern with being kept out of its money: at [315]–[317].
Costs of the appeal
62 The Court fixed costs of the appeal at $67,000 all in, to be paid by ICOP to TSCE, with the usual consequential orders. TSCE had prevailed on most of the issues in the appeal, and it was entitled to costs. ICOP’s success was limited to the MTBM rental costs issue and the liquidated damages issue, while the issue concerning the quantum of damages payable to ICOP for the Authorities’ Approvals issue was resolved through the parties’ agreement: at [320].
What did the trial judge order in the ICOP Construction v Tiong Seng dispute?
Before the appeal in [2024] SGHC(A) 1, the judge in the bifurcated HC/S 1086/2019 ordered Tiong Seng Civil Engineering to pay ICOP $1,333,298.52 and ICOP to pay TSCE $402,790.46 in delay damages, and found ICOP had wrongfully terminated the subcontract.
What was ICOP Construction (SG) Pte Ltd v Tiong Seng Civil Engineering about?
[2024] SGHC(A) 1 was an Appellate Division appeal arising from a construction dispute between ICOP, a microtunneling subcontractor, and main contractor Tiong Seng Civil Engineering, concerning liability on ICOP's claims and TSCE's counterclaims decided in the bifurcated trial's first tranche.
Which judges decided ICOP Construction (SG) Pte Ltd v Tiong Seng Civil Engineering?
The Appellate Division of the High Court decided Civil Appeal No 100 of 2022 with Woo Bih Li JAD, Kannan Ramesh JAD and Quentin Loh SJ. Quentin Loh SJ delivered the reserved judgment of the court on 2 January 2024 as [2024] SGHC(A) 1.
Statutes Cited
Cases Cited (19)
SG (5)
[2011] SGHC 82 [2019] SGHC 4 [2022] SGHC 257 [2022] SGHC(A) 44 [2023] SGHC(A) 10
SLR (10)
[2003] 2 SLR(R) 170 [2004] 3 SLR(R) 288 [2006] 3 SLR(R) 769 [2007] 4 SLR(R) 413 [2009] 4 SLR(R) 602 [2013] 4 SLR 193 [2015] 5 SLR 1422 [2022] 1 SLR 302 [2022] 2 SLR 1066 [2023] 1 SLR 536
UK (4)
[2007] EWHC 305 [2008] EWHC 6 [2012] EWHC 1773 [2016] EWHC 1875
Referenced in
Statutes interpreted in this judgment
Judgment
Read the full judgment on the official Singapore Courts portal.
Read on eLitigationSource: eLitigation ([2024] SGHC(A) 1)