China Construction (South Pacific) Development Co Pte Ltd v Spandeck Engineering (S) Pte Ltd

Andrew Ang JC:

[1] The plaintiff company is a building contractor. Sometime in 1994, the plaintiff was interested in tendering for a Housing and Development Board (“HDB”) project to build 492 dwelling units in Hougang under a contract known as the Hougang Neighbourhood 9 Contract 6 (“the N9C6 Contract”). At that time, the plaintiff was not pre-qualified to tender for a project of that size. According to its managing director, Chen Guo Cai (“Chen”), the plaintiff therefore approached Dr Tony Chi, the managing director of the defendant, to see if they could work together on the project. The defendant was also a building construction company and was pre-qualified to tender for the project. Chen said that the defendant was keen to supply the precast components and Civil Defence shelter doors required for the project.

[2] The parties decided to co-operate in the tender which the defendant was to submit to HDB. Chen gave evidence that the plaintiff worked very closely with the defendant in the tender process as it was intended by both that the plaintiff would be the main subcontractor. The intention was that the plaintiff would carry out all the works for the said project with the defendant supplying and installing the pre-fabricated components as well as the Civil Defence shelter doors.

[3] The defendant was successful in the tender and, by an exchange of correspondence comprising letters dated 26, 27 and 28 January 1995, the parties put into writing their agreement. (Prior to the submission of the tender, the parties had entered into an earlier agreement of 16 November 1994 but this was superseded by the subsequent letters.)

[4] Under the letter of 26 January 1995 (“the 26 January letter”) sent to the defendant, the plaintiff quoted for the following:

Paragraph (2) of the said letter provided for the appointment of a project manager under the defendant but for whom payment was to be borne by the plaintiff. It also provided that the project manager was to represent the defendant

Paragraph (3) provided, inter alia, that the proposed subcontract would be back to back with the HDB contract. Paragraph (4) provided that the “estimated contract sum shall be $31,966,375.00”, reference being made to Appendix I. Looking at Appendix I, one would understand how the figure of $31,966,375 was arrived at. In view of the plaintiff’s heavy reliance on Appendix I, the same is set out in full below:

[5] Paragraph (5) is interesting. It provided that the plaintiff was to furnish two security bonds for the sum of $1,835,854 – one in favour of HDB in the name of the defendant and the other in favour of the defendant to secure the plaintiff’s obligations under the subcontract.

[6] The 26 January letter was followed by the defendant’s reply of 27 January 1995 (“the 27 January letter”) in the following terms:

It will be observed that the letter made references to the 26 January letter. Paragraph (4) of the letter also provided that the “total contract sum” shall be $31,966,375 – the same figure described as the “estimated contract sum” in the 26 January letter and arrived at as shown in Appendix I. As if to drive the point home, the plaintiff’s managing director was asked to initial against para (4).

[7] In reliance upon the 27 January letter, the defendant contended that the contract between the parties was a “lump sum” contract for $31,966,375. The defendant further contended that the 26 January letter (and therefore Appendix I thereto) did not form part of the contract between the parties as it had been superseded. This was stoutly denied by the plaintiff, who countered that para (4) did not state that the contract was on a “lump sum” basis. The plaintiff insisted that it was important to see how the figure was arrived at. This necessarily entailed referring to the 26 January letter and Appendix I. The plaintiff contended that it was illogical to exclude the 26 January letter when the 27 January letter made specific reference to it. On the plaintiff’s interpretation, what the last paragraph of the 27 January letter did was to exclude letters and “understanding” prior to 26 January 1995.

[9] According to the plaintiff, the essence of the agreement between them was that the plaintiff became the main subcontractor, effectively taking over all the main contract works except for the precast components and the Civil Defence shelter doors. The plaintiff managed the works and the site as if it were the main contractor.

[10] The plaintiff averred that it was an implied term of the agreement or, alternatively, the understanding between the parties (and on which the plaintiff relied) that:

(a) the defendant would make progressive payments to the plaintiff based on the payment certificates issued by HDB to the defendant;

(b) the terms of payment of the said agreement was on a “pay when paid” basis, ie, that within a reasonable time after HDB made any payment to the defendant, the latter would then, in turn, pay the plaintiff; and

(c) the defendant would give to the plaintiff a true account of all amounts and times of any payments received by the defendant from HDB in relation to the N9C6 Contract.

[11] Prior to the commencement of works, the plaintiff appointed and used its own project manager for the site with the defendant’s consent. The defendant agreed that it would not charge the plaintiff the fee of $147,000 which the plaintiff would otherwise have had to pay. This change was subsequently confirmed in a letter dated 27 January 1997 by the defendant to the plaintiff. That same letter provided:

It will be noted that all the figures mentioned in the letter were the same figures appearing in Appendix I.

[12] In the course of the performance of the said agreement, the defendant issued payment vouchers or payment certificates to the plaintiff from time to time. On each occasion, it did this only after it had received progress payments from HDB.

[13] Upon receipt of the defendant’s payment vouchers or certificates, the plaintiff would issue its tax invoices to the defendant based on the information received.

[14] The plaintiff completed the works under the said agreement. As the N9C6 Contract had different completion dates for the construction of the various buildings, the plaintiff completed its works between December 1996 and 1 August 1997.

[15] As earlier mentioned, in the course of the performance of the said agreement, the plaintiff had submitted tax invoices to the defendant subsequent to receiving payment vouchers or certificates from the defendant. As at August 1997, the defendant had made payments invoiced by the plaintiff up to the 28th progress claim. This last progress claim made by the plaintiff was on 26 July 1997 by its tax invoice for the sum of $34,305 (not including goods and services tax (“GST”)), and was duly paid by the defendant.

[16] As at 26 July 1997, the defendant was holding retention moneys totalling $1,775,450, of which some were on account of HDB having deducted certain moneys by way of provision for liquidated damages and the non-submission of warranties, and others were because the defendant wanted to ensure the plaintiff’s compliance with certain aspects of the agreement between them. Save for the retention moneys that were held back as provision for liquidated damages and for the non-submission of warranties, the plaintiff did not agree to the retention of the other amounts. Nevertheless, according to Chen, the plaintiff decided not to make an issue of it then as it was something which would be easier to deal with once HDB had issued its final certificate to the defendant.

[17] On 7 January 1998, HDB issued to the defendant a provisional final account which was subsequently finalised between them as follows:

Following that, the defendant received payment in full from HDB at a date unknown to the plaintiff but after 29 September 2000.

[18] Based on the final account between the defendant and HDB, the plaintiff computed the final account between itself and the defendant, from which it was shown that $479,613.57 was payable to the plaintiff. As the defendant failed to pay the same despite the plaintiff’s demand, the plaintiff brought this action to recover the same together with GST and interest thereon.

[19] The defendant asserted that it did not owe the plaintiff any money under the agreement. On the contrary, it alleged that the plaintiff had been overpaid by an amount of $116,668.69. As earlier mentioned, the basis of the defendant’s contention was that the subcontract between them was for a lump sum price of $31,966,375 only. In addition to the alleged over-payment of $116,668.69, the defendant counterclaimed for the following:

(a) Prolongation costs (ie additional costs incurred by the defendant as a result of delays to the project) in the form of:

(i) the sum of $445,900.47 being “management fees and costs overheads”;

(ii) the sum of $65,000 being the additional site quantity surveyor fees ($5,000 x 13 months);

(iii) the sum of $143,500 being the additional costs for the project manager from July 1997 to December 2000 (41 months x $3,500 per month).

(b) The sum of $30,000 for the costs incurred in rectifying the defects enumerated in para 30 of the Re-Re-Amended Defence and Counterclaim.

(c) The sum of $8,672 for the costs of rental of a gondola for external painting works, transportation and manpower deployment.

(d) The sum of $2,340 incurred in employing a security company to carry out inspections on the site.

(e) The sum of $100,000 in respect of the non-submission of warranties.

[20] The principal issues in this action are the following:

(a) whether the terms of the agreement between the parties included the 26 January letter from the plaintiff to the defendant;

(b) if so, whether, on an interpretation of the agreement between the parties, the contract price payable to the plaintiff was

(i) to be calculated in accordance with Appendix I to the 26 January letter; or

(ii) a lump sum fixed at $31,966,375 only;

(c) in the event the court finds that the defendant’s interpretation of the agreement is correct, ie, that the agreement provides a lump sum price, whether both parties had so acted or conducted themselves on an assumption that the method of computation of the contract price was to be in accordance with Appendix I that the defendant is now estopped from denying that assumption;

(d) in the event that the court favours the plaintiff’s interpretation, or rules that the defendant is estopped from denying that Appendix I is to be followed in the computation of the contract price, what is the sum payable to the plaintiff; and

(e) whether the defendant has proved the alleged breaches by the plaintiff and, if so, what is the quantum of loss in respect thereof.

[21] In the defendant’s pleadings and in Dr Tony Chi’s affidavit of evidence-in-chief, the position taken was that the 26 January letter had been expressly excluded or superseded. It was only at trial that Dr Tony Chi conceded, under cross-examination, that the 26 January letter could be part of the documents evidencing the agreement between the parties. This concession was rightly made; reading only the 27 January and 28 January letters, one would have got the erroneous impression that the plaintiff was to carry out the entire scope of works under the N9C6 Contract, including all the precast elements. Nevertheless, Dr Tony Chi, and indeed the defendant’s counsel as well, sought to qualify the concession by saying that the 26 January letter would be let in provided it did not contradict the 27 January letter. The position taken was therefore that:

(a) the 27 January letter was paramount; and

(b) whatever was in the 26 January letter that further elaborated upon the agreement would be permitted, provided it did not contradict the 27 January letter.

[22] Two comments may be made about this. Firstly, albeit grudgingly, the defendant no longer contends that the last paragraph of the 27 January letter rendered the 26 January letter void. Accordingly, it has to be construed alongside the other two letters of the trilogy. Secondly, it is not open to the defendant to cherry pick parts of the 26 January letter favourable to its case and discard others repugnant thereto.

[23] Where possible, the court will give effect to any reasonable construction which harmonises apparently inconsistent clauses, rather than to hold that they are in conflict. To this end, we examine para (4) of the 26 January letter which reads as follows:

and compare it with para (4) of the 27 January letter in reply stating:

As can be seen from Appendix I to the 26 January letter, the sum of $31,966,375 (described as the “Revised Contract Sum”) is the figure arrived at after subtracting from the contract sum of $36,717,070 under the main contract with HDB various items including:

(a) the project manager’s fee (estimated);

(b) the supply and delivery of precast pantries or stores at $5,500 each (total: 492 pieces);

(c) the supply and installation of Civil Defence shelter doors (total: 492 pieces) to the precast pantries or stores; and

(d) the supply and delivery of the following precast lightweight partitions:

(i) 20,600m² of 75mm thick partitions at $30 per square metre; and

(ii) 3,075m² of 90mm thick partitions of $35 per square metre.

A note at the end of Appendix I clearly states:

Thus with respect to item (d), for example, the sum to be deducted in respect of the lightweight partitions must obviously be based on the amount actually supplied. It is clear therefore that the figure of $31,966,375 was correctly described in the 26 January letter as “the estimated contract sum” even if it was also called the “Revised Contract Sum” in Appendix I.

[24] By calling the same sum the “total contract sum”, did the defendant effect a total change in the character of that figure from a mere estimate (subject to final measurement) to a fixed or lump sum? In my view, it did not. Had the defendant wanted to change the basis of computation of the price, the defendant could easily have used words customarily used such as “lump sum” or other words to like effect such as “fixed price” or “firm price”. Indeed, the defendant’s main contract with HDB bears out this point. Clause 3 of the main contract states:

If truly it was the intent of the defendant to have a lump sum contract, it is strange that it stopped short of saying so.

[25] The defendant urged this court to ignore Appendix I, but at the same time it conceded that other parts of the 26 January letter form part of the agreement between the parties. This cannot be right. The defendant cannot pick and choose which parts of the 26 January letter to accept or omit. As plaintiff’s counsel submitted, the defendant “can only hope to explain why, taking all the contents of [the] three letters, its interpretation should be [the] right one”. Thus far, the interpretation of the agreement between the parties has been confined to a construction of the 26 January and 27 January letters without reference to extrinsic evidence.

[26] Presumably, the defendant will insist that the inconsistency has not been satisfactorily resolved. Where there remains any ambiguity or the meaning of the written words is not clear, evidence of the circumstances in which the agreement was made is admissible to assist in the ascertainment of the meaning of the written words. In Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989, Lord Wilberforce said at 995–996:

Going on to the object of ascertaining the intention of the parties in an objective sense, he further said at 996:

This was followed by Lord Hoffmann’s exposition on the law relating to the interpretation of contracts in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912:

[27] The same approach to the admission of extrinsic evidence forming part of the factual matrix was adopted by our Court of Appeal in MAE Engineering Ltd v Fire-Stop Marketing Services Pte Ltd [2005] 1 SLR 379 (“MAE Engineering”). Lai Siu Chiu J, delivering the judgment of the Court of Appeal, said at [23]:

She further added at [24]:

[28] Prior to the 26 January, 27 January and 28 January letters, the parties had entered into an agreement on 16 November 1994. When, in collaboration with the plaintiff, the defendant succeeded in tendering for the Hougang N9C6 project, the terms of the agreement were refined as shown in the trilogy of letters, thereby superseding the agreement of 16 November 1994.

[29] The opening paragraph of the antecedent agreement of 16 November 1994 clearly stated:

Clause 4 of the agreement provided:

It is clear from cl 4 that the defendant had agreed to have its works (viz, the supply and delivery of precast elements) measured and priced at $2 per square metre more than the lowest market price that the plaintiff was able to obtain. It is also illuminating that the plaintiff was given “the right to appoint other precasters” instead of the defendant. Read with the opening paragraph, it would appear that the parties recognised that, in the execution of the agreement between the parties, the defendant would be taking a subsidiary role vis-à-vis the plaintiff even though it would be the main contractor vis-à-vis HDB.

[30] As contemplated under the agreement of 16 November 1994, the parties sought to establish the price per square metre of the precast components to be supplied by the defendant. This can be seen, firstly, from a letter dated 10 January 1995 from the plaintiff responding to the defendant’s quotation of 3 January 1995. A further letter from the plaintiff dated 12 January 1995 referred to a discussion between the respective managing directors of the parties and enclosed a copy of a quotation. Evidence regarding these letters is admissible, as the purpose is merely to establish the objective fact that, following the 16 November 1994 agreement, there was negotiation on the unit prices of the precast components; the evidence is not to show what unit prices were or were not agreed: see Lord Wilberforce’s rationale for the exclusion of evidence regarding negotiations in Prenn v Simmonds [1971] 1 WLR 1381, and Lai Siu Chiu J’s judgment in MAE Engineering ([27] supra).

[32] When Dr Tony Chi was confronted with these documents, he attempted to say that the documents were quotes for other projects. When it was pointed out that the reference in the letters was “SDE/HOUG”, he conceded that it was in relation to the N9C6 project but then launched into a whole lot of matters irrelevant to the question put to him. (Unfortunately, this was not the only occasion that he was evasive. Time and again the court had to intervene because he avoided answering plaintiff’s counsel’s questions.)

[33] On this occasion, while seeking to explain away the irresistible inference that the parties had agreed to contract on the basis of measurement of quantities, Dr Tony Chi attempted to explain how the total amount of money attributed to the lightweight partitions was arrived at. A further explanation was given by him at pp 308–310 of the Transcript as follows:

Some explanation needs to be given as to this testimony.

[35] The problem with his testimony on the derivation of the figure is that, mathematically, it is not borne out. To begin with, the amount attributed to the precast lightweight partitions in the main contract with HDB was not $1m but $998,710.[1] The $1m figure therefore involved a rounding-off. Secondly, according to Dr Tony Chi, the common practice was to split the price 75:25 between the supplier and the party installing the partitions. The division in the ratio of 72.5:27.5 therefore represented an alleged deviation from the common practice. In spite of these two adjustments, the final figure arrived at, ie, $725,000, still falls short of the $725,625 figure shown in Appendix I. Whilst it is not uncommon to round off a figure, it is far-fetched to suggest that the figure of $725,000 somehow resolved itself into $725,625! No evidence was given as to how this happened. A much simpler explanation devoid of any mathematical aberration is that set out in para (d) of Appendix I, which works out to be exactly $725,625. In my view, the evidence given by Dr Tony Chi as to how the figure of $725,625 was derived is unbelievable.

[36] I note that para (2) of the 27 January letter provided that the subcontract was to be back to back with the HDB contract. Relying on this, counsel for the defendant submitted that since the HDB contract was on a firm price basis, likewise the subcontract had to be on such a basis.

[37] However, the 26 January letter also had a similar provision in para (3) and yet, in that letter, the contract was expressly on a re-measurement basis. “Back to back” in that letter therefore had to bear a narrower meaning than full incorporation of all HDB terms and conditions.

[38] A further provision of interest is para (5) of the 26 January letter which, in essence, is repeated in para (5) of the 27 January letter By this provision, the plaintiff was required to furnish two security bonds – one in favour of HDB but in the defendant’s name and the other for the same amount but in favour of the defendant. Why was the plaintiff required to furnish a security bond in favour of HDB but in the name of the defendant? Counsel for the defendant attempted to suggest other reasons, but the obvious reason to me was that the parties recognised that by virtue of the agreement between them, the plaintiff was de facto the main contractor.

[39] This would also explain why the defendant allowed the plaintiff’s staff to use name cards bearing the defendant’s name as well as stationery bearing the defendant’s letterhead. In this light, it is perfectly understandable why the contract sum is to be computed as set out in Appendix I (ie, on a re-measurement basis and as though the defendant was a supplier to the plaintiff) and not a lump sum as alleged by the defendant.

[40] Counsel for the defendant pointed to a wide discrepancy between the quantity of precast lightweight partitions estimated by Ms Woo in Appendix I and the amount delivered and paid for. The witness had said that although the flats might be described as three-room or four-room flats, the quantity of partitions required per flat would differ according to its design and layout. Hence, there was difficulty with getting an accurate figure.

[41] Ms Woo further suggested that the quantities could be affected by the substitution of bricks for the lightweight partitions. However, as counsel for the defendant pointed out, there was no evidence of any variation order issued by HDB. Be that as it may, in my view, how the quantity of lightweight partitions was over-estimated is of no relevance to the issue before us. The fact remains that the quantity was estimated as set out in Appendix I; it would be improbable in the extreme that the figure was trumped up by Ms Woo long before there was any dispute between the parties.

[42] Counsel for the defendant also set great store by what he maintained was an admission by Chen that the plaintiff’s work and the defendant’s work were “lump sum price works”. The evidence in the cross-examination was recorded as follows:

This caused some surprise as Chen appeared to agree that the plaintiff’s work was for a lump sum price. It is not possible to say whether or not Chen was thrown off by the opening limb of the defence counsel’s question:

However, elsewhere in his evidence, Chen had said that the plaintiff was responsible for the whole contract at $36,717,070 less the defendant’s work and that certain portions of the defendant’s work were subject to re-measurement. Therefore the court sought clarification from him at the end of his evidence. He confirmed that para (d) of Appendix I was subject to re-measurement.

[43] Whilst I would agree that the evidence of Chen was confusing at times, on this particular issue, the bone of contention between the parties being the very question whether the contract sum for the plaintiff was fixed at $31,966,375, it was unlikely in the extreme that he had intended to confirm the defendant’s case. Besides, Appendix I speaks for itself.

[44] Therefore, taking into account the factual matrix in the interpretation of the agreement between the parties, I am emboldened in my view that the contract price payable to the plaintiff was to be calculated in accordance with Appendix I to the 26 January letter.

[45] On the view that I have taken, it is unnecessary to consider the plaintiff’s alternative argument that, by the conduct of the parties subsequent to the agreement, the defendant is estopped from denying that the computation of the contract sum payable to the plaintiff should be in accordance with Appendix I. Nevertheless, I shall deal briefly with it.

[46] Ordinarily, a court may not look at the subsequent conduct of the parties to interpret a written agreement. Exceptionally, where the conduct amounted to a variation of contract or gave rise to an estoppel, it may do so: James Miller and Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583. In Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84, Lord Denning MR said (at 120–121):

This case was cited by the Court of Appeal in MAE Engineering ([27] supra) where the court observed at [44]:

The Court of Appeal also cited its own decision in Singapore Island Country Club v Hilborne [1997] 1 SLR 248, in which it laid down the following criteria for estoppel by convention (at [27]):

[47] In MAE Engineering, what was in issue was whether the parties had conducted themselves on the agreed premise that payment would be made on the basis of the area of the cladded duct, despite indications to the contrary in the subcontract. The respondent had failed to establish that the appellant’s payments were based on a shared assumption that the contract price should be derived from the area of the cladded duct. This was because the evidence of two witnesses, on which the respondent relied, was found to be contradictory and unreliable. It appeared to the court that the appellant had paid the first 14 claims submitted by the respondent without appreciating that the latter’s calculation was based on the area of the cladded, not the uncladded, duct. It held that there was no mutual understanding that payment would be based on the respondent’s method of calculation.

[48] Such is not the case here. The defendant had made 28 payments on various dates between 1995 and 1997 based on the method of computation as set out in Appendix I to the 26 January letter. On each occasion, the sum deducted in respect of the lightweight partitions was based on the amount supplied. The defendant sought to explain this away by saying that this was at the request of the plaintiff and that it applied the computation in Appendix I only to speed up payments. I do not accept this explanation. If the sum attributable to the lightweight partitions was fixed as alleged by the defendant, then on each occasion, the fixed amount should have been deducted. That could easily have been done. If that had been done, the plaintiff would not have been “overpaid” the sum of $116,668.69 as alleged by the defendant. The fact that it was not done clearly goes to show that the shared assumption between the parties was that Appendix I applied and that the sum to be deducted for the lightweight partitions was to be based on the actual amount supplied.

[49] Therefore, if it were necessary for me to do so, I would hold that the defendant is estopped from asserting that the agreement between the parties was a “fixed sum” or “lump sum” contract.

[50] The plaintiff’s position is that the defendant is liable to pay the plaintiff the sum of $479,613.57. The defendant has received the final payment from HDB, the provisional final account having been finalised and accepted by the defendant.

[51] The plaintiff’s claim for the sum of $479,613.57 was arrived at after deducting, inter alia, the sum of $353,978.44 in respect of the lightweight partitions. The plaintiff gave evidence that the figure of $353,978.44 was provided by the defendant. It argued that if the defendant alleged that more lightweight partitions were supplied, it was incumbent on the defendant to provide proof thereof. None was furnished. The best that the defendant could do was to point to HDB’s payment certificates, from which one could derive the value of the total lightweight partitions supplied and installed at $998,710. However, as was pointed out by the plaintiff, this figure was inclusive of the installation work done by the plaintiff.

[52] In contrast, the plaintiff was able, through cross-examination of Dr Tony Chi’s son, Dr Jeffrey Chi, to show that by November 1996 the defendant had supplied all the lightweight partitions and that the figure of $353,978.44 fully accounted for the amount supplied.

[53] Accordingly, I find that the defendant has failed to show that the figure of $353,978.44 attributed to the lightweight partitions is wrong.

[54] The defendant also alleged that it had paid medical fees but that the plaintiff failed to take account of this payment in arriving at the figure of $479,613.57 payable by the defendant to the plaintiff. The defendant gave Ms Lew Meow Heng (“Ms Lew”), the plaintiff’s financial controller, a summary to support its contention. When she was re-called as a result of the defendant having obtained leave to amend its pleadings, she produced an exhibit “P1”, the first page of which was the defendant’s summary. She gave a detailed explanation to show why the plaintiff’s computation was correct. Her evidence was not challenged, counsel for the defendant having elected not to cross-examine her further.

[55] Parenthetically, I should mention that counsel for the defendant sought leave to adduce further evidence through Dr Jeffrey Chi to challenge Ms Lew’s evidence. I disallowed it for the reason that he had chosen not to challenge Ms Lew’s evidence. To allow further evidence to be given would have necessitated re-calling Ms Lew yet again. Besides, in my estimation based upon what I had observed in the proceedings, there was little prospect of the defendant’s counsel making good his promise that the evidence would be “conclusive”. I therefore directed that the parties meet to resolve what I considered to be merely accounting issues. Despite having met, they remained unable to agree.

[56] Therefore, as the matter stands, we have the uncontroverted explanation given by Ms Lew upon her re-call. I accordingly find that the plaintiff’s computation of $479,613.57 is correct.

[57] I move on now to the defendant’s counterclaim, the particulars of which have been set out in [19] above.

[58] In view of my accepting the plaintiff’s interpretation of the agreement between the parties, there was therefore no overpayment of the sum of $116,668.69 as alleged or at all.

[63] In response, counsel for the defendant cited Prosperland Pte Ltd v Civic Construction Pte Ltd [2004] 4 SLR 129 in support of his contention that the period of limitation did not begin until September 2000 at the earliest. As plaintiff’s counsel pointed out, the latter case is inapplicable as it is based on s 24A of the Limitation Act (Cap 163, 1999 Rev Ed). That section extends the time limits for actions based on contract or tort where the plaintiff may not have had the requisite knowledge required for bringing an action in damages within the normal periods of limitation. Typically, it covers actions in respect of latent injuries and damage caused by latent defects. It has no application to the present case.

[67] Counsel for the plaintiff argued that such a contention was inconsistent with the defendant’s pleadings at para 43 of its Re-Re-Re-Amended Defence and Counterclaim. The basis for such a contention was that the words “present at the project” could only mean “present at the site”. If so, the period for which the claim was made would end when the handover took place on 11 December 1997. I am unable to accept this contention. Reading para 43 as a whole, one sees clearly that the defendant was referring to the “maintenance period”. The defendant’s claim was therefore consistent with its pleadings.

[68] The plaintiff sought to rely on a letter of 27 January 1997, by which the parties had agreed as follows:

In my view, this letter of 27 January 1997 merely sought to amend Appendix I of the letter of 26 January under which the project manager’s costs would have been deductible against the contract sum. The letter of 27 January 1997 was not intended to address the question of any prolongation costs.

[73] I agree with the plaintiff that the claim for the non-submission of warranties is a non-issue. Dr Tony Chi testified that the defendant had been refunded the sum of $100,000 by HDB. Therefore, there was no loss.

[74] In conclusion, I grant judgment to the plaintiff in respect of the sum of $479,613.57. I also allow the defendant’s counterclaim against the plaintiff as follows:

(a) $32,113.60 in respect of prolongation costs for the period 23 September 1997 to 11 December 1997;

(b) $25,089.57 in respect of the costs of employing a project manager for part of the maintenance period from 12 December 1997 to 11 December 2000; and

(c) $3,127 in respect of the costs of rental of the gondola and external painting works.

The net amount payable to the plaintiff after setting off the amounts allowed under the counterclaim shall be with interest at 6% per annum from the date of the Writ until payment. I will hear the parties on costs.

[1]According to Dr Jeffrey Chi’s affidavit of evidence-in-chief at para 62.