Hauslab Design & Build Pte Ltd v Vinod Kumar Ramgopal Didwania [2016] SGHC 222

Introduction

The plaintiff served a payment claim under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“the Act”) on the defendant. The defendant failed to satisfy the claim. The plaintiff proceeded to have its claim adjudicated. The defendant resisted the adjudication on the ground that one of the Act’s fundamental requirements was not fulfilled. His position was that he had no contract at all with the plaintiff. He accepted that he had entered into a contract which did fulfil the requirements of the Act, but argued that the counterparty to that contract was not the plaintiff but another entity entirely. He argued, further, that he had never agreed to that other entity novating his contract to the plaintiff.

The adjudicator rejected the defendant’s argument and found that the defendant had indeed agreed to his contract being novated to the plaintiff. He therefore determined the adjudication in the plaintiff’s favour. The plaintiff then applied for and secured leave ex parte to enforce the adjudication determination as a judgment or order of the court.

The defendant now applies to set aside that leave.

The defendant rests his setting-aside application on two submissions. First, he submits that the adjudicator had no jurisdiction to issue the determination against him because the defendant has never had a contract with the plaintiff within the meaning of s 4 of the Act. Second, he submits that the adjudicator breached his duty under s 16(3) of the Act to comply with the principles of natural justice.

Background

The contract

The defendant is the owner of a substantial property in District 11. In April 2013, he entered into a construction contract with a company known as Hauslab D&B Pte Ltd (“D&B”). The contract names the defendant as the “Employer” and D&B as the “Builder” and the “Contractor”. It obliges D&B to design and build for the defendant on his property a two-storey detached house with an attic and an open roof terrace. The contract’s value is a little under $5.1m. I shall refer to this contract as “the construction contract”.

Both D&B and the plaintiff are wholly-owned subsidiaries of a company known as Hauslab Holdings Pte Ltd (“Holdings”). Mr Tan Sinn Aeng Ben (“Mr Tan”) is a director of both D&B and of Holdings but is not a director of the plaintiff. Mr Tan describes himself as the “CEO” and “Principal Designer” of “the Hauslab Group”.

It will be immediately apparent that the names of the plaintiff and of D&B are confusingly similar. D&B’s full name (Hauslab D&B Pte Ltd) would ordinarily be intended and would ordinarily be read as being nothing more than an abbreviation of the plaintiff’s full name (Hauslab Design & Build Pte Ltd). But D&B is in fact and in law an entity entirely separate from the plaintiff.

Also in April 2013, soon after he signed the construction contract, the defendant formally authorised his wife, Ms Nidhi Vinod Didwania (“Ms Nidhi”), to issue instructions and to act on payment matters under the contract on his behalf. He did this by a letter on his personal notepaper addressed and sent to D&B in the following terms:

The evidence shows that Ms Nidhi did in fact personally give substantially all of the instructions under the contract to Mr Tan or his team. She also personally received and paid all of the progress claims issued under the contract. The plaintiff curiously denies having received this letter of authorisation. Be that as it may, the fact remains that the defendant accepts – and indeed asserts – before me that Ms Nidhi gave instructions and dealt with payment under the construction contract as his agent. All of her acts in this regard are therefore attributable to him.

The draft novation agreement

It was the plaintiff’s case in the adjudication and before me that the defendant agreed to novate the construction contract to the plaintiff on or about 1 December 2013. The parties are on common ground on only two points connected to this alleged novation. They agree that Mr Tan produced a draft novation agreement in December 2013 and handed it either to the defendant or to Ms Nidhi. They agree also that the defendant never signed the draft. All of the other facts underlying the alleged novation are disputed.

According to Mr Tan, between August and October 2013, he raised with the defendant the possibility of novating the defendant’s construction contract from D&B to the plaintiff. Mr Tan followed up on this proposal by personally handing a draft novation agreement either to the defendant or to Ms Nidhi in December 2013. Mr Tan later visited the defendant at his office to explain the rationale for the novation. He told the defendant that a sister company of D&B was pursuing a number of disputed claims under an unrelated contract in relation to an unrelated project. As D&B was the builder in that project, Mr Tan was concerned that the owner there might bring cross-claims against D&B and that that might lead the Building & Construction Authority (“BCA”) to order D&B to suspend work on all its ongoing projects, including the defendant’s. Mr Tan therefore proposed the novation in order to protect the defendant by insulating his project from the possible consequences of those unrelated disputes.

Mr Tan’s evidence is that the defendant agreed orally to a novation and to the plaintiff taking over from D&B as the builder on the defendant’s project. The defendant assured Mr Tan that he would sign the draft novation agreement and return it to the plaintiff after the defendant’s daughter, a lawyer in private practice, had reviewed it. Relying on the defendant’s assurance, and anticipating the return of the novation agreement duly signed, Mr Tan left it with the defendant.

The defendant’s and Ms Nidhi’s evidence is, not surprisingly, contrary to Mr Tan’s and consistent with each other’s. They say that Mr Tan personally handed a draft novation agreement to Ms Nidhi sometime in December 2013. The defendant and Ms Nidhi rejected any possibility of novation at all because they were not willing to hand over the construction of their new home to a company other than D&B “on a whim”. They were especially concerned that Mr Tan, who had been personally recommended to them by their property agent, was a director of D&B but was not even a director of the plaintiff and therefore had no management control over it. Accordingly, Ms Nidhi returned the draft to Mr Tan the very next day, unsigned.

Mr Tan does not accept that Ms Nidhi ever returned the unsigned draft.

The application for permission to carry out structural works

It appears that from the date of the construction contract until at least November 2013, D&B performed its obligations under the contract without any incident, or at the very least, without any incident which is material to the application before me.

In November 2013, the defendant signed a one-page form addressed to the BCA re-applying for permission to carry out structural works on his property under s 6 of the Building Control Act. The form named the new builder for his project as the plaintiff (Hauslab Design & Build Pte Ltd) and specified the plaintiff’s unique entity number (201327267G). I analyse this form in greater detail at [114] below.

Under cover of a letter dated 4 November 2013 from the project engineer to the BCA, the engineer submitted to the BCA electronically the defendant’s re-application form accompanied by the engineer’s own application. The subject heading of the engineer’s cover letter read “Joint Application for Permit to Carry out Demolition Works (Change of Builder)”. Like the defendant’s application, the engineer’s application was also framed as a re-application for permission to carry out structural works arising from a change of builder. The seventh page of this form also named the plaintiff as the new builder and gave the plaintiff’s unique entity number.

The project engineer included two other enclosures with his cover letter. One was a copy of the plaintiff’s builder’s licence issued on 29 October 2013 by the BCA. The second was a certificate issued by D&B under s 11(1)(f) of the Building Control Act certifying that it had completed, as at 1 November 2013, 65% of the structural work, 15% of the air-conditioning work, 18% of the electrical work and 15% of the plumbing work for the project in accordance with the plans supplied by the qualified person and in accordance with the Building Control Act and Regulations, leaving outstanding only the brickworks, doors, windows, swimming pool structure and ceilings.

Apart from this certificate, D&B did not feature in this joint application by the defendant and the project engineer to the BCA.

The next day, the defendant received a system-generated email from the BCA acknowledging receipt of his application. He immediately forwarded the acknowledgment by email to Mr Tan and his team.

Just over a week later, on 14 November 2013, the BCA issued a permit to carry out structural works in response to this application which named the plaintiff as the builder of the project. D&B was not referred to at all in the permit.

The progress payment claims

Over the 17-month period from July 2013 to November 2014, the defendant received 17 progress claims, issued at monthly intervals. Ms Nidhi, paid these 17 progress claims on the defendant’s behalf without demur.

On 2 February 2015, the plaintiff forwarded progress claim 18 dated 31 January 2015 to the defendant. It is this progress claim which has given rise to the dispute between the parties.

By progress claim 18, the plaintiff claimed from the defendant the sum of $396,875 “for work done from April 2013 to 31 January 2015” under the construction contract “as subsequently novated from Hauslab D&B PL to Hauslab Design & Build PL”.

Progress claim 18 complied with s 10 of the Act. It therefore constituted a payment claim within the meaning of that section. It also stated on its face that it was served under the Act.

The defendant did not, however, provide a payment response to the plaintiff within the time stipulated by s 11 of the Act. Neither did the defendant take the further opportunity to provide a payment response within the seven-day dispute settlement period under s 12(4) of the Act.

The adjudication

On 5 March 2015, the plaintiff gave the defendant notice as required by s 13(2) of the Act that it intended to make an adjudication application on its payment claim. Later that day, the plaintiff lodged an adjudication application under s 13(1) of the Act with the Act’s authorised nominating body, the Singapore Mediation Centre (“the SMC”). On the next day, the SMC served the adjudication application on the defendant under s 13(4) of the Act. On 9 March 2015, the SMC appointed the adjudicator and served notice of the appointment on the parties under s 14 of the Act. On 13 March 2015, the defendant lodged his adjudication response with the SMC under s 15 of the Act. Under s 17 of the Act, this meant that the adjudicator was obliged to determine the adjudication application on or before 27 March 2015.

On 15 March 2015 at 8.38 pm, the adjudicator sent an email directly to the parties, ie not through solicitors, in the following terms:

The defendant replied to the adjudicator on 16 March 2015 duly acknowledging this communication.

Neither party made any submissions to the adjudicator before his deadline of 5.00 pm on 17 March 2015. But between 5.40 pm and 6.05 pm that day, the plaintiff’s solicitors lodged with the adjudicator by email a set of written submissions, a bundle of documents and a bundle of authorities.

On 18 March 2015 at 9.50 am, the defendant’s solicitors at that time took the objection that the plaintiff’s submissions had been lodged out of time. They also took the objection that, under the Act, a claimant had no right of reply to the respondent’s adjudication response. However, the plaintiff had now taken the opportunity in its submissions to put in a full reply to the defendant’s adjudication response. As a result, the defendant’s solicitors invited the adjudicator either: (i) to reject the plaintiff’s submissions outright for being late; or (ii) to extend to the defendant a right of reply. The defendant’s solicitors asked for a right of reply on the grounds that the plaintiff’s submissions were lengthy and contained factual inaccuracies and erroneous statements of legal principle which, if left unaddressed, would cause the defendant “severe prejudice”. The defendant’s solicitors further stated that they intended to make only brief submissions for clarification in order to assist the adjudicator. They asked the adjudicator to permit them to do so by 5.00 pm on 23 March 2015.

The adjudicator responded to both parties just over an hour later, at 10.58 am. He informed them that he had decided to extend the deadline for the parties’ “final submissions” until 5.00 pm that day, 18 March 2015. His email concluded by instructing the parties, in boldface, as follows: “Please focus on the key points of dispute, keep it brief and adhere strictly to my deadline of 5.00pm today”.

At 2.12 pm on the same day, the defendant himself informed the adjudicator by email that: (i) his lawyers were in court until 5.00 pm that day; (ii) they were engaged in trial until Friday, 20 March 2015; (iii) they could not be expected to make their submissions that same day, ie 18 March 2015, upon such short notice; and (iv) he would suffer severe prejudice if he were not allowed to address and clarify the various issues raised by the plaintiff in its submissions. He reiterated his solicitors’ request that the adjudicator permit the defendant until 5.00 pm on Monday, 23 March 2015 to respond.

The adjudicator responded to the parties seven minutes later, at 2.19 pm. He informed them that his deadline of 5.00 pm that day remained unchanged. He said further:

The defendant responded to the adjudicator 20 minutes later, at 2.39 pm. He asked the adjudicator to extend the deadline until at least 5.00 pm the next day, 19 March 2015. The adjudicator did not respond to this request.

On 19 March 2015, by two emails sent at 7.49 pm and 8.03 pm, the defendant’s then solicitors submitted written submissions, a bundle of documents and a bundle of authorities to the adjudicator.

On 20 March 2015 at 11.14 am, the adjudicator rejected the defendant’s submissions and bundles because they were late and because they were lengthy. He said:

The determination

The adjudicator’s determination rested on three findings which are relevant to the present application.

First, the adjudicator held that there was indeed a contract between the plaintiff and the defendant within the meaning of s 4 of the Act. He accepted the plaintiff’s submissions and found that the defendant had agreed to novate his construction contract to the plaintiff. In particular, he accepted that the defendant’s agreement to the novation was evidenced by the defendant’s conduct in drawing cheques in payment of certain progress claims between progress claim 10 (dated 23 May 2014) and progress claim 17 (dated 15 December 2014) in the name of the plaintiff, not of D&B.

Second, he held that he was obliged to reject all of the defendant’s reasons for withholding payment which were set out in the defendant’s adjudication response. The adjudicator held that this was the clear consequence under s 15(3)(a) of the Act of the defendant’s failure to provide a payment response under s 11 of the Act.

Third, the adjudicator repeated his reason for rejecting the defendant’s request on 18 March 2015 for an extension of time:

I make an observation at this juncture. It is common ground before me that the question of jurisdiction is not for an adjudicator to decide. It is a question for the court hearing a setting-aside application to decide. In light of that, a respondent should not raise the issue of jurisdiction before an adjudicator – save perhaps only to preserve the point for a future setting-aside application to the court – and an adjudicator before whom his own jurisdiction is raised should not decide it. As the Court of Appeal said in Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal [2013] 1 SLR 401 (“Chua Say Eng”) at [36]:

So too, it is not for the adjudicator to decide whether or not he has complied with the rules of natural justice. Again, as the Court of Appeal said in Chua Say Eng at [65]:

To the extent that the adjudicator has expressed a view on these issues, therefore, I consider that I am not only entitled but obliged to come to my own view on each of them. One is a jurisdictional issue said to warrant setting aside and the other is a breach of duty said to warrant setting aside. Setting aside is the ultimate issue which I am obliged by the defendant’s application to determine.

The setting-aside application

With the adjudication determination in hand, the plaintiff secured on 8 April 2015 the leave of court under s 27 of the Act to enforce the adjudication determination in the same manner as a judgment or order of the court to the same effect. On 28 April 2015, the defendant filed his setting-aside application. At the same time, he paid the sum of $396,875 into court as required by s 27(5) of the Act.

The defendant makes his setting-aside application by way of an interlocutory summons in the plaintiff’s enforcement proceedings. The substantive relief which he seeks in his summons is an order setting aside the adjudication determination and an order setting aside the leave granted to the plaintiff to enforce the adjudication determination. These two claims for relief stand or fall together. Neither party suggests that the defendant’s application to set aside the leave granted to the plaintiff to enforce the adjudication determination ought, in the circumstances of this case, to be analysed separately or to be determined by principles separate from those which determine whether the adjudication determination itself ought to be set aside.

It is therefore to these principles which I now turn.

Setting aside

Power and grounds

In Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd [2015] 1 SLR 797 (“Citiwall”), the Court of Appeal held (at [42]) that the power to set aside an adjudication determination arises at common law, as an instance of the High Court’s supervisory jurisdiction, ie “the inherent power of superior courts to review the proceedings and decisions of inferior courts and tribunals or other public bodies discharging public functions”.

The court’s role in exercising this supervisory jurisdiction is restricted. It inquires only into fundamental procedural grounds arising from the adjudication. It cannot review the adjudication determination on the merits. That restriction, in addition to being inherent in the nature of the supervisory jurisdiction, is consistent with the underlying purpose of the Act. As the Court of Appeal put it in Citiwall at [48]:

Because the power to set aside an adjudication determination arises at common law, the Act nowhere expressly gives the court the power to do so. Instead, the Act assumes that such a power exists outside the Act and does no more than require the dissatisfied party, by s 27(5), to pay the unpaid portion of the adjudicated amount into court before invoking that power.

The Act likewise nowhere expressly spells out the grounds on which an applicant can succeed in either type of setting-aside application, whether to set aside an adjudication determination itself or to set aside the leave granted under s 27 of the Act to enforce an adjudication determination. There is thus no equivalent in the Act of s 48 of the Arbitration Act (Cap 10, 2002 Rev Ed) or of Article 34(1) of the Model Law on Arbitration read with s 24 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”). The grounds for setting aside – just like the power to set aside itself – are therefore to be found outside the Act and in the common law.

In Chua Say Eng, the Court of Appeal held (at [66] – [67]) that the court’s role on a setting-aside application is restricted to considering whether the respondent has established either of the two fundamental grounds on which the setting-aside power may be exercised:

(a) Whether the adjudicator was validly appointed, eg whether there is a payment claim and whether it has been validly served; and

(b) Whether the claimant, in making the adjudication application, failed to comply with a provision of the Act which is so important that the legislative purpose of the Act is that a breach of that provision should render the application invalid.

The second of these two grounds says nothing about the adjudicator’s conduct in making his determination. It focuses only on the claimant’s conduct in making its application. But that focus is simply the result of the nature of the actual challenge before the Court of Appeal in Chua Say Eng itself. That challenge related only to the claimant’s conduct. It will, of course, also suffice to set aside an adjudication determination if the respondent can show that the adjudicator, in making his determination, failed to comply with a provision of the Act which is so important that the legislative purpose of the Act is that a breach of that provision should render the determination invalid.

In SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (“SEF Construction”) at [45] Prakash J (as Prakash JA then was) set out seven grounds for setting aside an adjudication award. Although SEF Construction pre-dated Chua Say Eng, the following seven grounds from Prakash J’s decision are a convenient expansion on Chua Say Eng’s two fundamental grounds:

(a) Whether a contract exists between the claimant and the respondent within the meaning of s 4 of the Act;

(b) Whether, in accordance with s 10 of the Act, the claimant has served on the respondent a payment claim;

(c) Whether, in accordance with s 13 of the Act, the claimant has made an adjudication application to an authorised nominating body;

(d) Whether, in accordance with s 14 of the Act, the application has been referred to an eligible adjudicator who agrees to determine the adjudication application;

(e) Whether, in accordance with ss 17(1) and (2) of the Act, the adjudicator has determined the application within the specified period; and has determined: (i) the adjudicated amount (if any) to be paid by the respondent to the claimant; (ii) the date on which the adjudicated amount is payable; (iii) the interest payable on the adjudicated amount; and (iv) the proportion of the costs payable by each party to the adjudication;

(f) Whether, in accordance with s 16(3) of the Act, the adjudicator has: (i) acted independently and impartially and in a timely manner; and (ii) has complied with the principles of natural justice; and

(g) Whether, in a case where a review adjudicator or panel of adjudicators has been appointed under s 18 of the Act, conditions (a) to (f) are satisfied, mutatis mutandis.

The defendant mounts his setting-aside application squarely under sub-paragraph (a) and under the second limb of sub-paragraph (f) at [56] above. Thus, the defendant submits that the adjudicator lacked jurisdiction in the adjudication because there was no contract between the defendant and the plaintiff to which the Act applied, given that the defendant never agreed to novate the construction contract to the plaintiff. The defendant submits in the alternative that the adjudicator breached his duty to comply with the principles of natural justice in arriving at his determination because of, amongst other things, his procedural decisions between 18 March 2015 and 20 March 2015 which I have summarised at [32] to [38] above.

The issues

The two issues which the defendant’s setting-aside application raises are therefore:

(a) Whether there is a contract between the plaintiff and the defendant within the meaning of s 4 of the Act; and

(b) Whether the adjudicator failed to comply with the principles of natural justice in arriving at his determination, contrary to his duty under s 16(3)(c) of the Act.

These two issues raise a logically anterior issue: on whom does the burden of proof lie on these issues and to what standard must that burden be discharged. The answer to this question must be the same, regardless of whether it arises on an application to set aside an adjudication determination itself or on an application to set aside leave to enforce an adjudication determination.

It is to this preliminary issue which I first turn.

Burden and standard of proof

The parties are on common ground that the burden of proof in either type of setting-aside application rests on the respondent in the adjudication. That is so simply because it is the respondent who must move the court in both types of application. It is therefore always incumbent on the respondent to advance a positive case in order to satisfy the court that he ought to succeed in his setting-aside application.

It does not, however, suffice merely to note that the burden of proof rests on the respondent. It is also important to be clear about the standard of proof which a respondent must meet in order to discharge this burden on questions of fact. The defendant’s jurisdictional challenge turns, at least in part, on the following question of fact: did he agree to novate the construction contract to the plaintiff? I asked both counsel to address me on the standard which the defendant must meet to succeed on this question.

Plaintiff’s counsel argued that a respondent has to discharge his burden on a setting-aside application on the balance of probabilities. Defendant’s counsel, on the other hand, argued that the applicable standard is equivalent to that which applies on a summary judgment application. He submits, therefore, that all that a respondent has to do to succeed in his setting-aside application is to establish a reasonable or fair probability that the adjudication determination ought to be set aside. If a respondent is able to do that, the setting-aside application must succeed and the parties’ underlying disputes must go forward to be determined finally and on the merits in arbitration or at trial.

On the jurisdictional issue, therefore, defendant’s counsel’s submission is that all he has to show is that there is a reasonable or fair probability that the defendant never agreed to novate the construction contract to the plaintiff.

To support this submission, defendant’s counsel relies heavily on cases from England and from New South Wales. In my view, these cases are of no assistance to him. The cases he cites from England are distinguishable because the English regime for adjudication is founded on contract rather than statute. The cases he cites from New South Wales are distinguishable because they each applied a well-known standard established in an aspect of the general law of civil procedure rather than a specific standard held to apply under New South Wales’ statutory adjudication regime.

As a result, I have rejected the defendant’s submission. In my view, the plaintiff is correct: for a respondent to succeed in discharging his burden on a disputed question of fact which he advances on a setting-aside application, the respondent must establish that fact on the balance of probabilities.

In the circumstances of this case, therefore, the defendant cannot succeed on the issue of jurisdiction unless he can establish on the balance of probabilities that he never agreed to novate his construction contract to the plaintiff.

I now explain my reasons for rejecting the defendant’s submissions. I shall analyse first the English case cited by defendant’s counsel before turning to the New South Wales cases.

England

Although adjudication in England is regulated by statute, it is ultimately founded in contract. Access to adjudication in England arises either from terms which the parties have expressly agreed in their contract or from terms which statute implies into their contract.

The statute which regulates adjudication in England is the Housing Grants, Construction and Regeneration Act 1996 (“the English Act”). Section 108 of the English Act provides that adjudication is governed by the parties’ contract provided that the contract contains express provisions for adjudication which meet certain minimum requirements prescribed by ss 108(2) to 108(4) of the English Act. These minimum requirements extend to aspects of the adjudication procedure and to the duties and powers of the adjudicator. If the parties’ contract contains no express provisions for adjudication or contains express provisions for adjudication which fall short of the minimum requirements prescribed by statute, ss 108(5) and 114(4) of the English Act read together provide that the adjudication provisions set out in subsidiary legislation enacted under the English Act take effect as implied terms of the parties’ contract. The subsidiary legislation in question is the Schedule to the Scheme for Construction Contracts (England and Wales) Regulations 1998. That legislation is known commonly and simply as the “Scheme for Construction Contracts”.

One of those minimum requirements, imposed by s 108(3) of the English Act, is that the parties’ contract must expressly provide that the decision of the adjudicator carries temporary finality, ie that it bind the parties contractually until their underlying dispute is determined with full finality. If the contract contains no express provision to that effect, paragraph 23(2) of the Scheme for Construction Contracts read with s 114(4) of the English Act operates to imply a term into the parties’ contract conferring temporary finality on an adjudicator’s decision in the same terms as are set out in s 108(3) of the English Act.

As a result, the failure to comply with an adjudication decision under the English regime is simply a breach of contract. It constitutes a breach of either an express term or of a statutorily implied term of the parties’ contract. The consequence of that failure is the same as the consequence of any other breach of contract: the contract-breaker is liable to be compelled by the court to pay damages to the innocent party for breach of contract. Thus, in Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] All ER (D) 143 (“Macob”), Dyson J (as Lord Dyson then was) held (at [37]) that “the usual remedy for failure to pay in accordance with an adjudicator’s decision will be to issue proceedings claiming the sum due, followed by an application for summary judgment”.

This is an important point. The typical civil action in England, as in Singapore, offers a claimant two avenues to put the merits of his claim before the court for determination. The first avenue is through an application for summary judgment. The second avenue is at a full trial on the merits.

A claimant in England who seeks summary judgment will secure it if he can establish that “the defendant has no real prospect of successfully defending the claim…” and that “there is no other compelling reason why the case…should be disposed of at a trial”. These tests are found in Part 24.2(a) of the English Civil Procedure Rules, the analogue of our Order 14. A claimant who relies on the temporary finality of an adjudication decision for his claim will ordinarily expect to satisfy this test. That is the result of the fundamental importance which the English courts attach to upholding temporary finality and of the limited defences available against a claim which relies on that concept.

Under the English regime, therefore, a claimant who is unable to secure summary judgment on an adjudication decision in his favour will nevertheless have another opportunity at a full trial to put the merits of his claim arising from the adjudication decision before the court. That situation will undoubtedly be rare: the objectives of any adjudication regime militate against requiring a claimant to go through a full trial simply to secure the benefit of an adjudication decision. But the important point is that a respondent who secures any sort of leave to defend at the summary judgment stage under the English regime does not thereby bring the claimant’s attempt to secure the benefit of an adjudication decision to an end. The claimant’s attempt simply proceeds to trial.

Our adjudication regime is significantly different from the English regime, as I explain at [82] – [84] below. That is why the English case law is not at all helpful when considering the standard of proof which rests on a respondent who brings a setting-aside application under our regime.

Defendant’s counsel also relies on the English case of Project Consultancy Group v Trustees of the Gray Trust (1999) 65 ConLR 146 (“Project Consultancy”). The defendants in that case failed to comply with an adjudication decision. The claimant issued a writ against the defendants followed by an application for summary judgment. The defendants resisted summary judgment on the grounds that the adjudicator did not have jurisdiction over them. The argued that either: (i) they had no contract with the claimant; or (ii) if they did, it had been entered into before 1 May 1998, the date on which the English Act had come into force.

What Dyson J had to decide in Project Consultancy was not whether the claimant’s attempt to enforce the adjudication decision should succeed or fail. What Dyson J had to decide was whether the claimant was entitled to summary judgment on its claim. Therefore, echoing the language of Part 24.2(a) (see [74] above), he framed the question before him as being “whether the defendants [had] a real prospect of showing that the adjudicator was wrong in holding that a contract was concluded after 1 May 1998”.

After reviewing the evidence, Dyson J held that the claimant had failed to satisfy this test. It was therefore not entitled to summary judgment:

Dyson J’s decision is completely unremarkable in the light of the English adjudication regime. He had an action before him which sought contractual relief arising from the defendant’s failure to comply with an adjudication decision. The issue which arose was whether the parties had a contract at all, and if so whether the English Act applied to it. The plaintiff applied to Dyson J for summary judgment on its claim. The question which then arose, as it does on every application for summary judgment, was whether the plaintiff ought to be permitted to have its claim determined summarily or should be required to proceed to trial. Despite the claimant’s evidence and submissions, Dyson J found the defence to be at least arguable. He therefore concluded that the claimant’s claim should not be determined summarily and ought instead to proceed to trial, ie with the additional benefit of discovery of documents, cross-examination on the facts and fuller arguments on the law.

In Project Consultancy, Dyson J did not deny the claimant the benefit of an adjudication decision simply because the defendants’ grounds of challenge were “at least arguable”. Dyson J simply required the plaintiff to prove at trial that it was entitled to the benefit of the adjudication decision.

The adjudication regime in Singapore is significantly different from the adjudication regime in England. Our regime is a bespoke statutory process. It is not one which has been engrafted onto contract and therefore onto the ordinary procedure for enforcing contractual obligations. Instead, our regime is set out in primary and subsidiary legislation and in the case law interpreting and applying that legislation. This difference has two consequences which make the English case law of no assistance in deducing the standard of proof that a defendant in Singapore must meet on a setting-aside application.

First, the burden in an ordinary civil action, and therefore also in an application for summary judgment within that action, remains on the plaintiff. That is true in Singapore as it is in England. Under the English adjudication regime, therefore, a claimant who seeks the benefit of an adjudication decision bears the burden of establishing his contractual entitlement to do so. That is so whether the claimant is seeking relief summarily or at trial. Our Act, on the other hand, relieves a claimant of the burden of proof which would otherwise rest on him in enforcement proceedings by permitting him to enforce an adjudication determination simply by a process of registration. The onus is thereafter placed firmly on the respondent to bring a setting-aside application – of either type – and to satisfy the court that it should succeed.

Second, in the English regime, whether the claimant is able to show that the respondent has no real prospect of a defence determines only whether the enforceability of the adjudication decision should be determined summarily or at trial. In our regime, a respondent must bring an application to set aside an adjudication determination by originating summons, and must bring an application to set aside leave to enforce an adjudication determination by interlocutory summons in the claimant’s enforcement application. In either case, the challenge to the adjudication determination is resolved once and for all – at least at first instance – when the High Court considers and decides whether to exercise its supervisory jurisdiction in the defendant’s favour. A setting-aside application in our regime will not go to trial. There is therefore no warrant for applying on a setting-aside application under our regime the converse of the standard which suffices for a plaintiff to secure summary judgment.

New South Wales

The defendant also refers me to a number of decisions from New South Wales. I have reviewed them. None of them support his submission that the courts of New South Wales set aside an adjudication determination merely upon finding that the respondent has made out an arguable case of a lack of jurisdiction.

The adjudication regime in New South Wales is set out in the Building and Construction Industry Security of Payment Act 1999 (“the NSW Act”). Under s 24 of the NSW Act, if the respondent fails to pay an adjudicated amount, the claimant may obtain a certificate from the authorised nominating body setting out the names of the parties, the amount adjudicated and the date on which payment of the amount adjudicated was due. The claimant can then file that adjudication certificate as a judgment for a debt in any court of competent jurisdiction, upon which the certificate will be enforceable accordingly as provided in s 25(1).

The NSW Act contemplates in s 25(4) that the respondent is entitled to commence proceedings to have the resulting judgment set aside. The respondent is prohibited, in those setting-aside proceedings, from bringing a cross-claim, raising any defence to the underlying dispute or challenging the merits of the adjudicator’s decision.

The NSW Act does not specify the procedural nature of the setting-aside proceedings. But it has been established at common law in New South Wales that those proceedings are brought as judicial review proceedings invoking the supervisory jurisdiction of the court: per Spigelman CJ in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 at [5]. Where a respondent in New South Wales seeks a declaration that an adjudication determination is void, the appropriate form of relief is an order in the nature of certiorari quashing or setting aside the adjudication: St Hilliers Contracting Pty Ltd v Dualcorp Civil Pty Ltd [2010] NSWSC 1468 at [1]; Construction Law Vol 3 (Informa Law, 2011) by Julian Bailey at §24.183, footnote 681.

Fifty Property Investments

Counsel for the defendant cites the case of Fifty Property Investments Pty Ltd v Barry J O’Mara & Anor [2006] NSWSC 428 (“Fifty Property Investments”). The respondent in that case brought judicial review proceedings seeking a declaration that an adjudicator’s determination was void. One of the respondent’s arguments was that the adjudicator had erred in finding that there was a construction contract between the respondent and the claimant. Brereton J held (at [21]) that it was open to the reviewing court to decide that question of fact for itself because it went to jurisdiction:

Brereton J went on to consider the evidence in detail and concluded (at [42]) that the adjudicator had erred when he had found a contract to exist:

Nothing in this part of Brereton J’s judgment indicates that he was prepared to quash the adjudicator’s decision on the basis merely that there was an arguable case that there was no construction contract between the parties. On the contrary: Brereton J held that it was his duty to inquire into objective questions of fact which were relevant to the question of the adjudicator’s jurisdiction and to make those findings of fact, one way or the other, for himself on the available evidence.

Brereton J next considered the respondent’s alternative ground of challenge to the adjudicator’s decision, ie that the adjudicator had denied the respondent natural justice by communicating privately with one of the claimants. Brereton J accepted that there had been a denial of natural justice and turned to the question whether he should nevertheless exercise his residual discretion to allow the adjudication determination to stand notwithstanding that denial (at [53]). He declined to exercise that discretion because the defendants had failed to satisfy him that the breach of natural justice could not possibly have made a difference to the outcome (at [54]):

Defendant’s counsel cites in his submissions [54] of Brereton J’s judgment without citing [53]. Neither does counsel explain that at [54], Brereton J was considering a challenge based on a denial of natural justice rather than one based on a lack of jurisdiction. What Brereton J sets out in [53] and [54] is simply the analogue of the test which we apply to determine whether a denial of natural justice has caused prejudice to a party to an arbitration within the meaning of s 24(b) of the IAA. That test is set out in Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86 at [86] – [92] read in the light of L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal [2013] 1 SLR 125 at [54].

When paragraphs [53] and [54] of Fifty Property Investments are read together, it becomes clear that that case is no authority for the general submission which the defendant’s counsel makes that the standard of proof which a respondent must meet in a setting-aside application is to show merely a “possibility” that the adjudicator could have arrived at a different outcome.

Grave v Blazevic

The second decision from New South Wales on which defendant’s counsel relies is Grave v Blazevic Holdings Pty Limited [2010] NSWCA 324 (“Grave v Blazevic”). In that case, the claimant served two payment claims on the respondent. The respondent failed to provide a payment schedule (the analogue under the NSW Act of our payment response). Section 14(4) of the NSW Act therefore placed him under an immediate civil liability to pay the unpaid balance to the claimant. Section 15(2) of the NSW Act gave the claimant a choice between commencing action to recover the unpaid balance from the respondent as a debt and proceeding to have his claim adjudicated. However, s 15(4) of the NSW Act provided that if a claimant commenced an action in debt under s 15(2), a respondent who had failed to serve a payment schedule was not entitled in the civil proceedings to “raise any defence in relation to matters arising under the construction contract”.

The claimant elected to commence action and secured a default judgment against the respondent. The respondent applied to set aside the default judgment on the grounds that he was not a party to a construction contract with the claimant. The question which arose was whether that defence was a “defence in relation to matters arising under the construction contract” within the meaning of s 15(4) of the NSW Act. The judge at first instance held that it was. He dismissed the respondent’s application, holding that the respondent was therefore precluded by s 15(4) of the NSW Act from advancing that defence. The defendant appealed against that decision to the New South Wales Court of Appeal.

McDougall J observed (at [21]) that the first instance judge did not find that the respondent’s defence had no prospects of success. The question then was whether s 15(4) of the NSW Act precluded the respondent from advancing that defence in the proceedings. McDougall J concluded (at [36]) that it did not. Accordingly, he found (at [37]) that the respondent had succeeded in showing that he had an arguable defence to the claim and was therefore entitled to be let in to defend it.

It is unclear to me why defendant’s counsel submits that Grave v Blazevic supports his position. I reproduce [65] – [68] of his submissions:

Grave v Blazevic in my view offers no guidance on the approach I should take to a setting-aside application under our adjudication regime. First, the test of an “arguable defence” which featured in that case is simply the test which applies in New South Wales to ascertain whether a judgment entered against a defendant in ordinary civil proceedings by default ought to be set aside. It is not the formulation of a test which applies to a setting-aside application. Second, the outcome in that case turned entirely on the construction of the specific wording of the specific limb of s 15(4) of the NSW Act which was in play in that case. But I am not applying a statutory test at all in order to determine whether the defendant’s setting-aside application should succeed, let alone a test taken from the New South Wales statute. I am exercising the court’s common law supervisory jurisdiction.

Filadelfia Projects

The final New South Wales decision that defendant’s counsel relies on is Filadelfia Projects Pty Ltd v EntirITy Business Services Pty Ltd [2010] NSWSC 473 (“Filadelfia Projects”) . In that case, a developer sought an injunction to restrain a sub-contractor from enforcing an adjudication determination. The adjudicator had found, contrary to the developer’s case, that there was a contract directly between the developer and the sub-contractor. The developer sought the injunction on the grounds that the sub-contractor had failed to place before the adjudicator two critical documents in which the sub-contractor had, contrary to its case in the adjudication, asserted that its contract was not with the developer but with the main contractor.

McDougall J found (at [5]) that it was “at least arguable that if [the two documents] had been put before [the adjudicator], he might have taken a different view as to whether or not the relevant construction contract was one between [the sub-contractor] and [the developer] or one between [the sub-contractor] and [the main contractor]”. McDougall J also found that the applicant’s understanding had been that these documents had in fact been placed before the adjudicator. He then held (at [7]) that “[i]n those circumstances, I think, there is a serious question to be tried as to whether there was in existence a construction contract, to which the Act applies, between [the developer] and [the defendant].” Further, he held (at [8]), that “it may be arguable that there was a substantial denial of procedural fairness if, as is [the developer’s] case, [it] was given to understand that the relevant documents were before the adjudicator whereas in fact they were not.”

McDougall J concluded as follows (at [10]):

It suffices to say that Filadelfia Projects did not consider the test to be applied on an application to set aside an adjudicator’s determination. It was an application for an injunction. The test applied by McDougall J was accordingly the ordinary threshold test which applies whenever the court is asked to issue an interlocutory injunction: is there a serious question to be tried?

But this is not the impression given by defendant’s counsel’s summary of Filadelfia Projects:

I reject the defendant’s attempt to assimilate the well-established standard for granting an interlocutory injunction to the standard to be applied to a defendant on a setting-aside application under the Act.

Accordingly I reject the defendant’s reliance on the New South Wales authorities in its entirety.

Conclusion

For the reasons I have given, I do not consider that the defendant can succeed in having the leave to enforce the adjudication determination set aside on his jurisdictional point if all that he is able to show is that there exists a real prospect of success that there was no novation, an arguable case that there was no novation, a possibility that the adjudicator could have reached a different outcome on novation, a triable issue on novation or a serious question to be tried on novation.

In my view, the burden which rests on the defendant is the ordinary civil burden to establish his case on the balance of probabilities. To succeed on his jurisdictional challenge, therefore, the defendant must show that it is more probable than not that the defendant never agreed to novate his construction contract from D&B to the plaintiff.

This must be the correct position, and for two reasons. First, after I dispose of the defendant’s setting-aside applications, there will be no future opportunity to consider at first instance whether the defendant’s jurisdictional challenge was validly brought. I must therefore decide that question – and, for that purpose, decide all underlying questions of law and fact – now, once and for all and with full finality, subject only to appeal. That is so even though whether the defendant agreed to novate his construction contract to the plaintiff is also a question which a court or arbitrator will have to determine when it inquires into the merits of the parties’ claims and defences.

Second, requiring the defendant to prove a disputed question of fact to this high standard is entirely consistent with the underlying purpose of the Act. The purpose of the Act, and indeed of any adjudication regime, is to yield a determination which carries temporary finality so long as certain prerequisites are satisfied. That goal would be completely undermined if all that a respondent had to do to succeed in displacing temporary finality was anything other than to establish on the balance of probabilities each factual question underlying its case for setting aside. To the extent that this high burden on the defendant carries with it the risk of error, it is the considered policy of the Act to place that risk of error on the respondent, as the party making payment, rather than on the claimant, as the party receiving payment.

Jurisdiction

I now turn to consider the issue of jurisdiction and the disputed question of fact underlying it.

I emphasise the limited nature of the task which I am now about to undertake. I consider the question of novation for the limited purpose of deciding only whether the adjudicator’s determination should carry temporary finality as provided for by s 21 of the Act. Further, I consider the question of novation on the basis of affidavit evidence alone. In keeping with the spirit of s 21(3) of the Act, nothing which I decide on this issue will prevent the parties from arguing the question of novation afresh if it arises in the entirely separate context of the plaintiff seeking a determination on the merits of the parties’ actual underlying dispute with full finality, ie as to whether the defendant is, in fact and in law, contractually liable to pay the plaintiff.

The defendant’s case is that he never agreed to novate the construction contract to the plaintiff, whether orally or in writing. He relies on the undisputed fact that he never signed the draft novation agreement. The plaintiff concedes this last point, as it must. But it submits that the defendant orally agreed to a novation when Mr Tan proposed this between August and October 2013 (see [12] above) and when Mr Tan visited the defendant at his office and handed him the draft in December 2013 (see [13] above). Alternatively, the plaintiff submits that the defendant’s conduct indicates that he agreed to the novation.

I am unable to find on the balance of probabilities that the defendant never agreed to novate his construction contract to the plaintiff for two reasons: (i) the defendant named the plaintiff as the builder in his application for permission to carry out structural works; and (ii) Ms Nidhi on the defendant’s behalf paid several progress claims between May 2014 and January 2015 by way of cheques drawn in favour of the plaintiff rather than in favour of D&B.

The application for permit to carry out structural works

As described at [16] – [21] above, in November 2013, the defendant re-applied to the BCA for a permit to carry out structural works. The very first box at the top of the first page of the re-application form characterised it as arising from “Change of Builder”. Part B at the foot of this form consisted of the defendant’s express declaration that he wished to appoint the plaintiff as the builder for the project under the Building Control Act. The defendant signed this form immediately below this declaration as the owner. The project engineer submitted the defendant’s re-application to the BCA together with his own re-application for BCA’s approval of the change of builder.

I accept that the defendant’s signature on this re-application form is evidence: (i) that he was aware that the plaintiff was to replace D&B as the builder for his project; (ii) that he agreed that that should happen, subject to BCA approval; and therefore (iii) that he also agreed to novate his construction contract with D&B to the plaintiff.

The defendant claims that he signed this declaration before he became aware of D&B’s proposal to novate the contract to the plaintiff. He also claims that the relevant sections in the application form were blank when he signed it. Mr Tan denies that the application form was blank and submits that it is his usual practice, before making applications like these, to send an email to the defendant enclosing the form with all relevant fields filled in.

The defendant’s evidence is unconvincing. The form dealt with the safety of the structural works comprised in his project and conveyed important information to the government regulator overseeing his project. I do not accept that he would have signed an important form such as this in blank. I find also that his decision to forward the BCA’s acknowledgement email to Mr Tan (see [21] above) demonstrates his desire to keep Mr Tan informed of the progress of the application. That, in turn, demonstrates his understanding of the significance of the application to Mr Tan and the Hauslab group.

Even if the defendant’s evidence that he signed a blank form is true, however, that would still tell against his case. His readiness to sign a blank form would be evidence of his indifference to the identity of the builder. That too undermines his case that he positively refused to novate the contract away from D&B.

The defendant points out that the engineer sent the application to the BCA on 4 November 2013, before the date on which the plaintiff alleges the novation took place, ie 1 December 2013. The defendant argues that this indicates that Mr Tan “had simply unilaterally assumed that [the defendant] would agree to the proposed novation, without actually getting his consent or approval to do so”. I reject this argument. I accept Mr Tan’s evidence that the defendant indicated to Mr Tan between August 2013 and November 2013 that he would agree to novating the construction contract to the plaintiff. In that light, I accept also Mr Tan’s explanation that the application form for the plaintiff to replace D&B as the builder was submitted to the BCA before the novation because there would be no point in novating the construction contract from D&B to the plaintiff unless the BCA had already approved the change of builder from D&B to the plaintiff.

Progress claims: issuance and treatment

The second reason I am unable to find on the balance of probabilities that the defendant never agreed to novate the construction contract to the plaintiff is the evidence relating to the issuance of progress claims and how they were treated. For these purposes, I attribute Ms Nidhi’s conduct to the defendant. That is because the defendant expressly authorised her to represent him in payment matters arising under his construction contract (see [9] above).

All progress claims issued from commencement of work until 1 December 2013, ie progress claims 1 to 5, consistently named D&B as the contractor. All progress claims issued after 1 December 2013, ie progress claims 6 to 18, consistently named “Hauslab Design & Build Pte Ltd”, ie the plaintiff, as the contractor (see Table 1 at the end of this judgment). The defendant’s own tabulation also accepts this to be correct.

After May 2014, Ms Nidhi paid no progress claims to D&B. Between May 2014 and December 2014, the defendant received progress claims 10 to 17. She paid five of these eight progress claims by cheques naming “Hauslab Design & Build Pte Ltd”, ie the plaintiff, as the payee (see Table 2 at the end of this judgment). Of the remaining three progress claims, she paid progress claim 11 in cash and progress claims 12 and 16 by cheques drawn in favour of “Cash”.

Ms Nidhi’s conduct suggests to me that she, and the defendant as her principal, accepted that it was the plaintiff who was contractually entitled to payment under, at the very least, progress claim 10 onwards. That in turn suggest that she accepted that the defendant was obliged to make those payments to the plaintiff. That amounts to accepting that the plaintiff had become the defendant’s contractual counterparty under the construction contract. These payments to the plaintiff are quite inconsistent with the defendant’s case that he never agreed to novate the contract.

The defendant tries to explain away these cheques by saying that it was Mr Tan who prepared them for Ms Nidhi to sign and that it was therefore Mr Tan who wrote the words “Hauslab Design & Build Pte Ltd” as the payee of each of these five cheques. He also notes that the entries in Ms Nidhi’s cheque register reflect the payee simply as “Hauslab”, without any additional words to indicate whether she intended to pay the plaintiff or D&B.

Neither point assists the defendant in discharging his burden. Even if he is correct that it was Mr Tan rather than Ms Nidhi who wrote the plaintiff’s name as the payee on each cheque, the fact remains that Ms Nidhi signed these cheques with the plaintiff named as the payee. I do not find it credible that she signed the cheques without noting the name of the payee. These cheques were for large amounts ranging from about $170,000 to $360,000 and totalling nearly $1.5m. That is just under 30% of the total value of the construction contract. I do not accept, on the balance of probabilities, that Ms Nidhi signed these cheques without intending the cheque to benefit the plaintiff rather than D&B. That indicates very strongly her agreement, on behalf of the defendant, to a novation of the construction contract to the plaintiff.

Even if I were to take the defendant’s evidence at its highest, it demonstrates merely that Ms Nidhi was entirely indifferent to the identity of the counterparty to the construction contract. But that does not assist the defendant to discharge his burden. If anything, this evidence undermines his case that the identity of his contractual counterparty was of critical importance to him.

Further, the word “Hauslab” in Ms Nidhi’s cheque register is, by itself, ambiguous. The manner in which Ms Nidhi recorded the payee of these cheques does not advance the defendant’s case.

Inconsistencies in the invoicing

Against the weight of this evidence, the defendant relies on three points to argue against any novation on and from 1 December 2013:

(a) Even after December 2013 and until May 2014, invoices continued to be issued on D&B’s letterhead and to direct payment to be made to D&B.

(b) Mr Tan directed that payment for progress claims 6 to 9, for the period from December 2013 to March 2014, be made to D&B rather than the plaintiff.

(c) The unique entity number of the contractor in all progress claims before 31 January 2015 was D&B’s unique entity number.

I do not consider that these points outweigh the evidence I have summarised above at [114] – [129]. The balance of probabilities remains tilted firmly against the defendant.

Further, the most that can be said on this evidence is that it is possible that the novation took place in May 2014 rather than December 2013. The important point, however, is that it is the defendant who bears the burden of proving on the balance of probabilities his case in order to succeed in his setting-aside application. His case is that he never agreed to novate his contract with D&B to the plaintiff. The defendant cannot discharge this burden merely by pointing out that the plaintiff’s case is inconsistent with the pattern of invoicing and payment between December 2013 and May 2014. If the evidence suggests that a novation did take place, but that it took place in April or May 2014 rather than in December 2013, the consequence remains that the defendant has failed to discharge his burden of proof. Even taking into account this evidence, therefore, I am wholly unable to conclude on the balance of probabilities that there was never a novation.

Further objections by the defendant

I will now deal with the three final points on the issue of novation which the defendant raised. In my judgment, none of these have any merit.

The defendant argues that he refused to sign the draft novation agreement because he was not willing to hand over the redevelopment of his home to a company in which Mr Tan, who was recommended to the defendant by his estate agent, was not even a director. But as Mr Tan points out, he is both a director and shareholder of Hauslab Holdings, which wholly owns both the plaintiff and D&B. Mr Tan was therefore in a position to exercise management and control over the plaintiff even though he was not one of its directors. Further, it is also clear from the evidence that Mr Tan continued to be personally involved in the project even after 1 December 2013. This is consistent with the defendant’s own evidence. In these circumstances, I reject the defendant’s stated reason for refusing to novate the construction contract. There is no rational connection between Mr Tan not being a director of the plaintiff and the defendant’s stated reason for not agreeing to a novation of the construction contract to the plaintiff.

The defendant also suggests that the subcontractors involved in the project believed D&B to have been the contractor rather than the plaintiff. In my view this does not assist the defendant. There are any number of reasons why a subcontractor may be mistaken about the true contractual position between an owner and a contractor. The subcontractors’ beliefs about the contractual relationship between the defendant and the plaintiff are of little relevance in ascertaining the actual nature of that relationship.

Finally, the defendant advances the curious submission that the application of the Contract (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed) (“the Third Parties Act”) is excluded by virtue of cl 35 of the REDAS Design & Build Conditions. Accordingly, the defendant submits, the plaintiff is a non-party to the Contract and “cannot rely on the rights contained in the Contract to claim against the Defendant”. The fact is that the plaintiff’s claim does not rely on third-party rights at all. The plaintiff’s claim relies on rights found in a contract arising directly between the defendant and the plaintiff by novation. As the Court of Appeal explained in Fairview Developments Pte Ltd v Ong & Ong Pte Ltd and another appeal [2014] 2 SLR 318 at [46]:

I therefore reject this submission in its entirety.

Having considered all the evidence, therefore, I find that the defendant has failed to prove on the balance of probabilities that he never agreed to novate his construction contract with D&B to the plaintiff. I therefore cannot find that the adjudicator lacked jurisdiction.

I cannot allow the defendant’s setting-aside application on the jurisdictional ground advanced.

Natural justice

I now turn to consider the defendant’s alternative submission that I should allow his setting-aside application because the adjudicator breached the principles of natural justice.

An adjudicator has an express statutory duty under s 16(3)(c) of the Act to comply with the principles of natural justice:

The defendant’s case

The defendant’s case is that the adjudicator breached this express statutory duty in three ways:

(a) First, the adjudicator was biased. On 18 March 2015, he granted the plaintiff a unilateral and retrospective extension of time for its submissions which its solicitors had filed after his deadline of 5.00 pm on 17 March 2015. But when the defendant requested an extension of time on 18 March 2015, the adjudicator rejected the defendant’s request and thereafter rejected the defendant’s submissions on the basis that they had been filed out of time.

(b) Second, the adjudicator did not allow the defendant an adequate opportunity to respond to the plaintiff’s submissions of 17 March 2015. After receiving the plaintiff’s submissions between 5.40 pm and 6.05 pm on 17 March 2015, the defendant had only “a few hours” to respond with his own submissions and comply with the adjudicator’s extended deadline of 5.00 pm on 18 March 2015, even though the plaintiff’s submissions contained “several factual inaccuracies” which in the defendant’s view required clarification.

(c) Finally, the adjudicator did not adequately apply his mind to the parties’ dispute. The adjudicator’s remarks in his emails of 18 March 2015 and 20 March 2015 indicate that he had “more or less decided on the outcome of the adjudication before even hearing what [the defendant] had to say”. The adjudicator also issued his adjudication determination on 20 March 2015, seven days before the deadline of 27 March 2015 imposed upon him by the Act. This, the defendant submits, is evidence of the “rushed manner in which he dealt with the matter”.

Natural justice in adjudications

In W Y Steel Construction Pte Ltd v Osko Pte Ltd [2013] 3 SLR 380 (“W Y Steel”), the Court of Appeal (at [22]) identified the objective of our adjudication regime as achieving a quick decision on a payment claim and conferring on that decision the benefit of temporary finality:

The content of an adjudicator’s statutory obligation to comply with the principles of natural justice under s 16(3)(c) of the Act is tempered by this objective. The Court of Appeal in W Y Steel cited with approval (at [23]) the following passage from Macob (at [14]):

Adjudication is an “expedited and … abbreviated” process by design. This expedited process and the finality attached to its outcome is designed to address the risk of injustice to a claimant arising from delayed payment. By design, therefore, there is not the luxury of time in adjudication to indulge in the “grinding detail of the traditional approach to the resolution of construction disputes”. This aspect of the adjudication process tempers the content of the duty to comply with the principles of natural justice. This aspect of the process also carries with it the inevitable risk of achieving only “somewhat roughshod” justice (W Y Steel at [22]). Making the finality attached to the outcome of this process only temporary is designed to address the risk of injustice to the respondent.

An application to set aside an adjudication determination for breach of the duty to comply with the principles of natural justice is not a species of appeal and must not be used as though it were. In AM Associates (Singapore) Pte Ltd v Laguna National Golf and Country Club Ltd [2009] SGHC 260, Prakash J refused to set aside an adjudication determination for failure to comply with the principles of natural justice. She remarked (at [26]) that the Act:

With these observations in mind, I turn to analyse the defendant’s case on natural justice.

The adjudicator’s timeline

An adjudicator has a broad discretion in relation to procedural matters. Section 16(4) of the Act provides as follows:

Section 16(6) of the Act obliges the parties to an adjudication to comply with the adjudicator’s requirements and directions.

In my view, the adjudicator exercised his procedural powers properly and entirely in accordance with the principles of natural justice. I say that for the following reasons.

First, the defendant does not challenge the adjudicator’s initial direction given on 15 March 2015 requiring the parties to submit their “replies, rebuttals or additional information” with regard to “both the Adjudication Application dated 5 March 2015 and the adjudication response dated 13 March 2015” by 5.00 pm on 17 March 2015. The significant point to note is that this initial direction was for both parties to put in their primary submissions together, ie not sequentially. What this direction extended to the parties, therefore, was an opportunity for each party to set out in these primary submissions its own case and to respond to the other party’s case, but only to the extent that the other party’s case was then known. This direction did not extend to the parties an opportunity to make reply submissions, responding to the other party’s primary submissions.

One of the defendant’s complaints to the adjudicator was that the plaintiff took the opportunity in its submissions to respond to the defendant’s adjudication response. But that is precisely what the adjudicator’s email of 15 March 2015 invited the plaintiff to do (see [29] above). That the plaintiff would do so was therefore clearly foreseeable on 15 March 2015 itself. If the defendant objected to the plaintiff being given an opportunity to respond to the defendant’s adjudication response, or wanted an opportunity to make reply submissions or otherwise to have the last word, it was for the defendant’s solicitors to raise that with the adjudicator as soon as he issued his directions on 15 March 2015. At the very least, the defendant’s solicitors should have foreshadowed then to the adjudicator that the defendant reserved his right to seek an opportunity to respond to the plaintiff’s submissions after having seen them. They did none of these things.

Second, the defendant allowed the adjudicators’ deadline of 5.00 pm on 17 March 2015 to expire without putting in any primary submissions at all. The defendant was therefore content to let the adjudicator arrive at a determination with no primary submissions from the defendant. The defendant thus implicitly invited the adjudicator to proceed on the basis of the material before him as at 5.00 pm on 17 March 2015, including any primary submissions which the plaintiff chose to put in. The defendant extended that implicit invitation knowing that the plaintiff could well use its primary submissions to rebut the defendant’s case as set out in the adjudication response.

Third, it is true that the plaintiff put in its primary submissions an hour after the adjudicator’s deadline. But, apart from suggesting it is evidence of bias, the defendant does not allege that the adjudicator breached his duty to comply with the principles of natural justice merely by accepting these submissions from the plaintiff out of time. In any event, the adjudicator did not accept these submissions out of time without more. Of his own initiative, he extended the time for both parties to put in their primary submissions until 5.00 pm on 18 March 2015.

One effect of this extension of time was to cure, unilaterally and retrospectively, the plaintiff’s non-compliance with the adjudicator’s directions of 15 March 2015. But another effect was to give the defendant a second opportunity to put in his primary submissions, even though he had been content to let the previous opportunity pass him by the previous day and even though he now had the plaintiff’s submissions in hand.

The defendant’s real complaint is not that the deadline so extended was insufficient time for the defendant to put in primary submissions. The defendant’s complaint is that the extended deadline was insufficient time for him to file reply submissions. This is apparent from his solicitors’ letter to the adjudicator asking expressly for a chance to reply. But the fact remains that the defendant did not seek and had never sought an opportunity to reply at any point before the morning of 18 March 2015. That is so even though it is always in theory foreseeable, when submissions are not exchanged sequentially, that an opposing party’s primary submissions may raise issues calling for a reply. And in this case, as I have mentioned, it was in fact foreseeable that the plaintiff would use its primary submissions to attempt to rebut defendant’s adjudication response.

To the extent that the defendant sought an opportunity on 18 March 2015 to file reply submissions, therefore, he was seeking an indulgence from the adjudicator. The defendant was seeking the adjudicator’s permission to do something new and which he had never foreshadowed. Once again, it was well within the adjudicator’s discretion to decline to extend to the defendant that indulgence without breaching his duty to comply with the principles of natural justice.

To put it another way, the principles of natural justice impose a prima facie obligation on an adjudicator to give both parties a reasonable opportunity to be heard before determining the adjudication. The content of this obligation is, of course, tempered by the fundamental objective of adjudication, by its expedited and abbreviated nature and by the circumstances of any particular case. Assuming in favour of the defendant that the content of the adjudicator’s duty to comply with the principles of natural justice on the facts of this case required him to give the defendant an opportunity to be heard before issuing a determination, the adjudicator gave the defendant that opportunity by his direction given on 15 March 2015 and again on 18 March 2015. I find that that opportunity was entirely reasonable. Making every assumption in the defendant’s favour, the adjudicator’s duty to comply with the principles of natural justice went no further than that. But the defendant did not take up either of those opportunities. Instead, having eschewed those opportunities, he tried to insist on a right of reply. The principles of natural justice, at least as they operated in the circumstances of this case, did not oblige the adjudicator to give the defendant a right of reply.

It was unfortunate that the defendant’s lawyers were engaged in a trial until 5.00 pm on 18 March 2015. But the defendant had voluntarily given up his right to make primary submissions on 17 March 2015 and had no right of reply. The unavailability of the defendant’s solicitors is not a ground on which I can find the adjudicator’s directions to be in breach of natural justice.

Acting in a timely manner and avoiding unnecessary expense

Even if the defendant’s request of 18 March 2015 is not characterised as seeking an indulgence, I still cannot find the adjudicator to have breached his duty to comply with the principles of natural justice.

Pursuant to ss 16(3)(a) and (b) of the Act, the adjudicator is required to act in a timely manner and to avoid incurring unnecessary expense. These are both legitimate considerations for an adjudicator to take into account when considering the content of his duty to comply with the principles of natural justice. The plaintiff submits that these considerations of procedural efficiency and economy were within the contemplation of the adjudicator in his conduct of the proceedings. I agree.

The adjudicator consistently took the view, not unreasonably in my view, that the adjudication before him was not complex and did not warrant lengthy and detailed primary submissions. In his email of 18 March 2015 at 10.58 am extending time until 5.00 pm that day, he expressly directed the parties to “focus on the key points of dispute, keep it brief and adhere strictly to [the] deadline”. In his email of 18 March 2015 at 2.19 pm rejecting the defendant’s request for a further extension to 23 March 2015, he again explained that “[t]he points of dispute are quite clear and requires (sic) only brief rebuttals. It is not necessary to prolong this adjudication. No response by the deadline is also acceptable.” At [13] of his determination, the adjudicator reiterated that he had rejected the defendant’s request for a longer extension to avoid “prolong[ing] the adjudication process as the points of arguments from both parties [were] clear and adequate for [his] determination.”

Having applied his mind to the degree of complexity of the adjudication before him, and bearing in mind the Act’s objective of speedy resolution of claims in adjudication, the adjudicator was not minded to grant a longer extension of time to permit the defendant to put in his submissions. I can see no basis on which to say that the adjudicator thereby breached his duty to comply with the principles of natural justice.

Rejecting the defendant’s submissions

In his email of 20 March 2015, the adjudicator gave two reasons for rejecting the submissions tendered by the defendant in the evening of 19 March 2015. First, the defendant’s solicitors had tendered the submissions after the extended deadline of 5.00 pm on 18 March 2015. Second, the submissions were “not as brief as directed but lengthy which contained a total of 164 pages”. The adjudicator proceeded with his determination as the disputed points were clear and he did not wish to prolong the process.

As I have mentioned, parties have a statutory obligation under s 16(6) of the Act to comply with procedural directions given by an adjudicator. The adjudicator found that the defendant was in breach of his directions. I find that the adjudicator’s grounds for rejecting the defendant’s submissions were reasonable. The defendant only has himself to blame for failing to comply with the clearly articulated instructions on the timeliness and length of the submissions.

The defendant submits that his “new set of submissions was important because they highlighted the factual inaccuracies in [the plaintiff’s] further submissions and dealt with other important issues which impacted the adjudicator’s decision”. I reject this submission. In RN & Associates Pte Ltd v TPX Builders Pte Ltd [2013] 1 SLR 848, the plaintiff submitted that the adjudicator had breached the principles of natural justice when he rejected certain supplementary bundles tendered by the plaintiff after the deadline for filing an adjudication response. The plaintiff argued that the rule of audi alteram partem was infringed as the supplementary bundles were an essential part of its case and their exclusion meant that the plaintiff was denied the opportunity to be fully heard. Andrew Ang J dismissed the plaintiff’s application to set aside the determination. I agree entirely with Ang J’s observations (at [64]):

As pointed out by Andrew Ang J, it is open to an adjudicator to decide what material or considerations are relevant and important for his decision. The adjudicator was entitled to and evidently did take the view that the material already before him was sufficient for his determination.

For the foregoing reasons, I reject the defendant’s allegation that the adjudicator breached the rules of natural justice.

Bias

I also reject the submission that the adjudicator’s determination is tainted by actual or apparent bias. The only support for this submission appears to be the adjudicator’s allegedly unequal treatment of the parties. But the adjudicator did not treat the parties unequally.

The adjudicator initially gave both parties until 5.00 pm on 17 March 2015 to put in their primary submissions. The plaintiff put in its submissions, albeit late. The adjudicator accepted those submissions, even though they were late, by retrospectively extending the deadline for both parties’ primary submissions to 5.00 pm on 18 March 2015. If the defendant had filed concise primary submissions, had had done so within the extended deadline, the adjudicator would have been obliged to accept them. But the defendant instead chose to file lengthy submissions, by way of reply, and did so out of time. The adjudicator was under no obligation to accept them.

An allegation of bias is a serious one and should not be made lightly. This allegation of bias should not have been made.

Haste in making the determination

The defendant’s final allegation is that the adjudicator was in an unnecessary and unseemly haste to issue his determination. It is true that he issued his adjudication seven days before the statutory deadline. The suggestion, however, that issuing a determination early is a fact from which alone it can be inferred that the adjudicator has breached his duty to comply with the principles of natural justice is meritless.

The adjudicator was fully entitled – and indeed obliged by statute – to act expeditiously and economically. While the Act fixed a deadline for his determination, he cannot be criticised merely for completing his work before the deadline. He can similarly not be criticised merely for setting a timeline which sets the stage for him to complete his work before the deadline. It would undermine the objectives of the Act to criticise an adjudicator merely for taking either approach. What is important is that the adjudicator complies with the principles of natural justice and applies his mind to the parties’ dispute. I am satisfied from a reading of the adjudication determination that the adjudicator understood the dispute and came to a reasoned conclusion on it.

In making this finding, I make no finding on the merits of the parties’ underlying dispute as they placed it before the adjudicator or as they may in the future place it before a court or an arbitrator. I simply observe that there is nothing to support the defendant’s suggestion that the adjudicator “did not adequately apply his mind to the case”.

There is therefore no basis in this aspect of the defendant’s case.

No prejudice

In any event, the defendant cannot succeed in his setting-aside application merely by showing that the adjudicator breached his duty under s 16(3)(c) of the Act to comply with the principles of natural justice. For the reasons set out above at [54] – [55], it is my view that the defendant must show in addition that it is the legislative purpose of the Act that a breach of s 16(3)(c) should render the determination invalid. I cannot find in the Act any hint of a legislative purpose to invalidate every adjudication determination in which there has been a breach of the principles of natural justice, no matter how trivial or serious and regardless of whether that breach has caused the respondent prejudice. I therefore consider that for the defendant to succeed in his setting-aside application, it is necessary for him to establish that he suffered prejudice by reason of the breach of the principles of natural justice on which he relies.

I am satisfied that even if the adjudicator did breach his duty to comply with the principles of natural justice in his procedural decisions between 18 March 2015 and 20 March 2015, that breach caused the defendant no prejudice.

Section 15(3)(a) of the Act precludes a respondent from putting before an adjudicator any reason for withholding payment which was not included in his payment response:

The defendant failed to provide a payment response to the plaintiff after being served with the payment claim. The adjudicator concluded, therefore, that the defendant could not raise in his adjudication response, or indeed in the adjudication itself, any reason at all for withholding payment of the amount claimed in progress claim 18. On this ground, the adjudicator rejected outright the defendant’s reasons for not satisfying progress claim 18 which he set out in his adjudication response.

The plaintiff submits that given this finding, even if the adjudicator had accepted the submissions which the defendant tendered late on 19 March 2015, those submissions could not have had any material impact on the outcome of the adjudication.

I agree. Section 15(3)(a) is a jurisdictional provision. It curtails not only the power of an adjudicator to allow a respondent to raise reasons for withholding payment which were not included in his payment response, it also curtails the adjudicator’s power even to consider those reasons at all: W Y Steel at [33]. To the extent that the adjudicator is alleged to have breached the principles of natural justice by rejecting the defendant’s submissions on 19 March 2015, he would have been obliged to disregard those submissions even if they had been submitted on time. Since the defendant provided no payment response, the adjudicator had no power to consider any reasons which the defendant might have given in those submissions for withholding payment. And to the extent that the adjudicator is alleged to have breached the principles of natural justice by extending time retrospectively on 19 March 2015 to validate the plaintiff’s submissions tendered out of time on 18 March 2015, the adjudicator in fact made no reference to those submissions in arriving at his adjudication determination.

Finally, I note in passing that the defendant does not seek to set aside the adjudication determination on the grounds that the adjudicator breached his duty, in a case where a respondent fails to file a payment response, to apply his mind to the plaintiff’s payment claim rather than simply accepting the claim in full by default as a result of the operation of s 15(3) of the Act (W Y Steel at [48] and [52]).

Accordingly, I find that the defendant suffered no prejudice by the adjudicator’s procedural decisions between 18 March 2015 and 20 March 2015, even if I were to assume – against my findings – that those decisions breached the adjudicator’s duty to comply with the principles of natural justice.

Conclusion

For the reasons I have given, I have dismissed the defendant’s setting-aside application. I have ordered the sum of $396,875 which the defendant paid into court pursuant to s 27(5) of the Act together with any interest accrued on that sum to be released to the plaintiff.

Table 1

Party named in progress claims 1 to 18

Table 2

Cheques issued to pay the plaintiff between 5 May 2014 and 4 Dec 2014

Table 3

Party named in invoices supporting progress claim 1 to 18