Articles

A. Introduction

1. “What a difference a “day” makes.” These were the pertinent observations of Andre Maniam JC in Trustee of the estate of Tay Choon Huat, deceased v Soon Kiat Construction & Maintenance Pte Ltd [2020] SGHC 212 (“Tay Choon Huat”) wherein he set aside an adjudication determination made under the Building and Construction Industry Security of Payment Act (Cap. 30B, 2006 Rev. Ed.) for being a day late.

B. Background facts

2. The facts of Tay Choon Huat are fairly straightforward.
3. Soon Kiat Construction & Maintenance Pte Ltd (i.e. the contractor) (the “Contractor”) entered into a construction contract with the Plaintiff, the late Tay Choon Huat (i.e. the employer) (the “Employer”) (the “Contract”), incorporating the Articles and Conditions of Building Contract (Lump Sum Contract, 9th Ed) of the Singapore Institute of Architects (the “SIA Conditions”).
4. The regime for the submission of payment claims and payment responses under the SIA Conditions is governed by Clause 31.(2) and Clause 31(15)(a) of the SIA Conditions which provide as follows:-

Clause 31.(2)(a)

“The Contractor shall be entitled to serve on the Employer a payment claim (a copy of which shall be forwarded to the Architect) as follows:

1. 1. Where pursuant to Sub-Clause (1)(b) hereof, the interim payment is to be based on periodic valuation; the Contractor shall submit the payment claim on the last day of each month following the month in which the Contract is made (or otherwise by such time or on such day specified in the Appendix); or
   2. Where pursuant to Sub-Clause (1)(a) hereof, the interim payment is to be by stage instalments, on the completion of the relevant stage.

Subject to section 10 of the SOP Act, the basis of the Contractor’s payment claim shall comply with the valuation rules of the Works as set out under Sub-Clause (4) hereof.”

(emphasis added)

Clause 31(15)(a)

“Within 21 days after the interim payment claim is served on the Employer by the Contractor, the Employer shall respond to the interim payment claim by providing, or causing to be provided, a payment response to the Contractor who shall be entitled to payment of any sum stated therein as due to the Contractor on the date or within the period provided under Sub-Clause (16) hereof.”

(emphasis added)

5. The Contractor served a payment claim on the Employer on 20 April 2020, who provided the payment response on 15 May 2020. The adjudication application (“AA”) was lodged on 28 May 2020.

C. Parties’ respective cases

6. The Employer contended that the AA was served late. However, the Contractor claimed that the AA was submitted on time. The parties’ respective cases in this regard are summarized in the table below:-

7. Hence, the issue was whether the word “day” in Clause 31(15)(a) of the SIA Conditions included public holidays. The Contractor argued that the word “day” in Clause 31.(15) had the same meaning as defined at Section 2 of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (the “SOP Act”), ie, unless the context otherwise requires: “‘day’ means any day other than a public holiday within the meaning of the Holidays Act (Cap. 126)”.

D. Analysis of the Decision

8. The learned Andre Maniam JC surveyed the existing case law on the issue and determined that ultimately, the definition of “day” in each construction contract stands to be construed on the language of each individual contract.¹ In arriving at his decision, Maniam JC carried out a thorough survey of existing case law and provided his observations on each of these cases:

1. 1. ATY Pte Ltd v ATZ Pte Ltd [2016] SCAdjR 39 (“ATY v ATZ”): In ATY v ATZ, the learned adjudicator noted that the SIA Conditions expressly defined the term “payment response” as having the same meaning as that found in the SOP Act, but did not take an identical approach for the word “day”. This indicated that the drafters of the SIA Conditions intended to have a plain and ordinary meaning ascribed to it. The learned Adjudicator also noted that the term “day” was used in many clauses under the SIA Conditions. If the term “day” were to be interpreted as having the same meaning as that under the SOP Act, express words have to be used to make that intention clear. Additionally, this indicated that the drafters of the SIA Conditions intended that the term “day” was to have a consistent definition within the same contract. The learned adjudicator’s findings and reasoning (as set out at [26] and [27] of Tay Choon Huat) eventually found favour with Maniam JC. Maniam JC decided Tay Choon Huat in favour of the Plaintiff along similar lines of reasoning as that taken by the learned adjudicator in ATY v ATZ. In particular, Maniam JC agreed with the learned adjudicator in ATY v ATZ (as set out at [40] of Tay Choon Huat) that a consistent approach to time-related terminology should be used (as opposed to a “pick and choose” approach).²
   2. AFR Pte Ltd v AFS Pte Ltd [2011] SCAdjR 70: Maniam JC mentioned the learned adjudicator’s decision briefly at [16] of Tay Choon Huat. While the learned adjudicator’s decision was in relation to an earlier edition (i.e. 7^th edition) of the SIA Conditions, Maniam JC found it useful to note that the definition of “day” therein was found to include public holidays.
   3. Fujitec Singapore Corp Ltd v GS Engineering & Construction Corp [2016] 1 SLR 1307 (“Fujitec”): Maniam JC declined to follow this decision as it concerned a contract which did not incorporate the SIA Conditions. He also additionally stated at [34] of Tay Choon Huat that this decision was not relevant as there was no suggestion that the contract there had expressly adopted only certain SOP Act definitions, unlike the Contract in the present case.
   4. UES Holdings Pte Ltd v KH Foges Pte Ltd [2018] 3 SLR 648 (“Foges”): Maniam JC declined to follow this decision as it also concerned a contract which did not incorporate the SIA Conditions. At [36] of Tay Choon Huat, Maniam JC further elucidated that the material provisions in the contract in this decision were fundamentally different from those in the present case, as the scope of the terminology that was to be adopted from the SOP Act in the contract in Foges was wider than the Contract in the present case.

9. It is noteworthy that, at the end of the day, Maniam JC simply and succinctly explained his reasoning at [37] of Tay Choon Huat as follows:

"Ultimately, the particular contract in each case stands to be construed.”

10.  On the facts in Tay Choon Huat, Maniam JC found that that the word “day” in clause 31.(15)(a) of the SIA Conditions, and in the Contract (which incorporates the SIA Conditions), includespublic holidays. In coming to his decision, he considered the following matters:-

1. 1. The drafters of the SIA Conditions chose not to incorporate the SOP Act definition of “day”, while incorporating the SOP Act definitions of “payment claim” and “payment response”.³ In doing so, he accepted the Employer’s argument that “this reflected a deliberate decision by the drafters of the SIA Conditions not to define “day” the same way it is defined in the SOPA, whereas they did expressly define “payment claim” and “payment response” in accordance with the SOPA.”
   2. He also noted that the parties agreed on a Contract Period of six calendar months that expressly included public holidays and that it was common ground that “day” in relation to liquidated damages included public holidays. These points further supported an interpretation of “day” in the Contract as including public holidays.
   3. Given that various other periods of time are provided for in the Contract, both in the letter of award and the SIA Conditions, Maniam JC preferred to give a consistent treatment of them all (in terms of whether public holidays are included or excluded) so as to avoid confusion and ambiguity.

E. Significance of the Decision and whither guidance from an appellate court is necessary on this issue?

11. This decision provides a much-needed summary of the existing case law on this often-discussed and fundamental issue. It also helpfully provides some clarification to one of Singapore’s most-used standard-form contracts, the SIA Conditions, on the meaning of the word “day”. As highlighted in the numerous decisions on the issue above, a dispute on the definition of “day” under a construction contract when determining the period to provide a payment response comes to the fore rather often. Unfortunately and as can be gleaned from the decision above, there are no consistent results, especially when the contract incorporates bespoke elements. Understandably, in Fujitec, the High Court held that the period for filing a payment response included public holidays whereas the High Court in Foges held that period for filing a payment response excluded public holidays. In this regard, Maniam JC took special care to distinguish the decision of Foges in Tay Choon Huat and observed in particular:-⁴

“What readily distinguishes Foges from the instant case is that the contract in the former had stated that “the relevant provisions of the SOPA shall apply to this Sub-Contract in respect of payment claim(s), payment response(s) and the date(s) on which progress payment(s) become(s) due and payable” [emphasis added] – the court held that the SOPA definition of “day” was fundamental to the provisions of the SOPA relevant to payment claims and payment responses, and the parties had expressly acknowledged that those provisions would apply (see [93] and [101] of the judgment). The contract in Foges was therefore worded very differently from the Contract in this case; article 9 of the SIA Conditions was more limited in only providing for “payment claim” and “payment response” to “have the same meaning and effect” as those words in the SOPA and the regulations thereunder.”

12. If the opportunity so arises, it will be interesting to see whether the Appellate Division of the High Court or the Court of Appeal would provide its thoughts and observations on this issue. This may be necessary to add certainty to the contracting arrangements for all players in the building and construction industry given the far-reaching implications of a claimant’s or respondent’s incorrect interpretation of the timelines associated with filing and serving a payment claim or payment response (as the case may be).
13. To this end, the authors would observe as follows:

1. 1. First, it is interesting to note that, under English law, there does not seem to be any rule of construction that, in construing a document, the same meaning must be assigned to an expression throughout; it is only in cases of doubt or ambiguity that it is necessary to resort to the device. In Watson v Haggitt and ors [1928] AC 127, the Privy Council observed as follows:-

“The contention of the appellant and the judgments of the two judges who decided in his favour are based upon a supposed rule of construction that the same meaning ought to be given to an expression in every party of the document in which it appears. … The truth is there is no rule of such general application as is contended for by the appellant. A difficulty or ambiguity may be solved by resorting to such a device, but it is only in such cases that it is necessary or permissible to do so.”

1. 2. Second, both Lee Sieu Kin J and Quentin Loh J (as he then was) appear to accept that the SOP Act should be the first port of call when interpreting the word “day” in respect of the timelines for providing payment responses for contracts not involving the SIA Conditions.⁵ In particular, Quentin Loh J (as he then was) had suggested that there should be a presumption that this is so unless the context yields a different meaning. He observed at [100]:-

“When parties contract with the provisions of a statute in mind, and when the terms of those statutory provisions are defined by that statute, then generally, if the contract uses the same terms, the terms should be interpreted in accordance with the statutory definitions, unless the context yields a different interpretation. This is simply an application of the principle of contextual interpretation.” 

F. Concluding Remarks

14. When concluding a construction contract, all contracting parties should pay particular attention to the use of time-related terminology, e.g. “months” and “calendar months”; “days” and “calendar days”. Parties should, as far as possible, ensure consistency in the use of time-related terminology in the contract. Alternatively, Parties may wish to consider expressly setting out definitions of such time-related terminology or expressly incorporating the SOP Act definitions of the time-related terminology to ensure that such disputes are kept to a minimum.
15. For the time being, the latest approach of the Courts in defining the word “day” would be to look at the entirety of the contract and review how the word “day” is used in other parts of the contract. Pending clarification from an Appellate Division of the High Court or the Court of Appeal, and out of an abundance of caution, it may be helpful for contractors and employers to assume that the word “day” includes public holidays when filing their respective adjudication applications and payment responses. Although there is less time to prepare, this would ultimately ensure that the documents are duly filed on time given the draconian consequences of a late filing under the SOP Act.

Contributed by:

Monisha Cheong - Senior Associate, TSMP Law Corporation

Ng Guoxi - Senior Associate, Dentons