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Main Contractor Successful in Adjudication Application despite Final Payment Claim being submitted after Contractual Deadline

In Yau Lee Construction (Singapore) Pte Ltd v Far East Square Pte Ltd [2018] SGHC 261, the Developer, Far East Square Pte Ltd (“Far East”), had applied to the Singapore High Court in late 2018 to set aside an Adjudication Determination obtained by Yau Lee Construction (Singapore) Pte Ltd (“Yau Lee”) (“setting-aside application”).

One of the grounds for the setting-aside application was that the Final Payment Claim, from which the Adjudication Determination was obtained, was served after the expiry of the maintenance period of the contract.

The contract between Far East and Yau Lee was based on the Articles and Conditions of Building Contract (Measurement Contract) (Seventh Edition, April 2015) published by the Singapore Institute of Architects (“Conditions of Contract”). The Conditions of Contract required Yau Lee to submit the Final Payment Claim to the architect before expiry of the maintenance period but Yau Lee submitted the Final Payment Claim after expiry.

Such service, Far East argued, was contrary to the Building and Construction Industry Security of Payment Act (Cap. 30B) (“SOPA”), which required payment claims to be submitted at the time stipulated in the relevant contract.

The Singapore High Court, however, dismissed Far East’s setting-aside application. It followed the ruling of the Singapore Court of Appeal in Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd [2018] 1 SLR 317, that objections relating to the date of service of payment claims should be raised in a valid payment response, failing which such objections will not be accepted as a ground to challenge the resulting Adjudication Determination.

The Singapore High Court further held, in any event, that by continuing to certify payment claims for interim progress payments, submitted after the maintenance period had expired, Far East and the architect effectively waived the requirement for the Final Payment Claim to be submitted before expiry of the maintenance period. Far East and the architect therefore were not entitled to treat earlier payment claims for interim progress payments, as a final claim.

This case demonstrates that claimants should submit their final payment claims within the time stipulated in the relevant contract to forestall challenges to the submission date being contrary to the relevant contract. Conversely, this case also demonstrates that claimants which have missed the contractual deadline for submission of final payment claims may still utilise statutory adjudication under SOPA, depending on the factual matrix of the relevant case.

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