Backho (S) Pte Ltd v KSE Marine Works Pte Ltd [2022] SGHC 11

Introduction

In Summons No 4141 of 2021, the applicant, KSE Marine Works Pte Ltd (“KSE”), seeks to set aside the Adjudication Determination (the “AD”) dated 27 July 2021 in Adjudication Application No SOP/AA 165 of 2021 (“AA 165”) pursuant to s 27(5) of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“SOPA”). At the same time, KSE also seeks to set aside the court order granting the respondent, Backho (S) Pte Ltd (“Backho”), leave to enforce the AD in Originating Summons No 790 of 2021.

KSE had filed the present application to set aside the AD four days after the stipulated 14-day period under O 95 r 2(4) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (the “ROC”). KSE argues that the 14-day statutory period to set aside the AD is not a mandatory deadline but merely an advisory. Thus, KSE is not prohibited from lodging the application to set aside the AD even though it had exceeded by 4 days from the prescribed period of 14 days. In the alternative, if the 14-day period is a mandatory deadline, KSE seeks leave for an extension of time to lodge the application to set aside the AD.

Background to the dispute

KSE and Backho are both companies incorporated in Singapore. KSE is in the marine construction business. Backho’s primary business activities are the rental of excavation equipment, operators, and related activities. At the material time, Mr Lee Chung Hee (“Mr Lee”) was an Executive Director of KSE while Mr Nam Kyuhyun (“Mr Nam”) was the Managing Director of Backho.

KSE was engaged by Hyundai Engineering & Construction Co Ltd (“Hyundai”) as a subcontractor for the project known as “Reclamation and Marine Works at Tuas Western Coast” (the “Project”).

The quotations

Following a period of negotiations, on 30 August 2019, Backho sent to KSE a quotation titled “Re: Quotation for: Rental of Heavy Equipment” (Ref: QT/19/08/161/R1) for the rental of a “Super Long Arm Excavator”, an operator and an option of either (a) a grab attachment or (b) a sieving bucket (the “30 August 2019 Quotation”). KSE opted for the second option and sometime in September 2019, Backho began the rental of the Super Long Arm Excavator with a sieving bucket and an operator.

Following another period of negotiations, Backho submitted another quotation to KSE on 4 February 2020, titled “Re: Quotation for: Rental of Heavy Equipment (Tuas West Coast)” (Ref: QT/20/02/025) (the “First 4 February 2020 Quotation”). This quotation provided for the rental of excavator equipment (including one Super Long Arm Excavator), dump trucks, LED lighting tower and automotive diesel oil, together with operators, a driver, four banksmen and two site supervisors.

On the same day, upon the request from KSE, Backho also sent KSE another quotation, titled “Re: Quotation for: Transportation of Dredging Sand Material (Tuas West Coast)” (Ref: QT/20/02/026) (the “Second 4 February 2020 Quotation”). The quotation stated that it was to “Provide Transportation including Manpower, Equipment, Diesel for Dredging Sand (<300m)”.

All three quotations bore Mr Nam’s signature and KSE’s company stamp. However, they were not signed by KSE. Nevertheless, it was not disputed that KSE had received these quotations.

The Alleged Oral Agreement

According to KSE, after receiving the Second 4 February 2020 Quotation, Mr Lee submitted the rate of S$1.90/m3 for an estimated guaranteed quantity of 1,000,000m3 to Hyundai, the main contractor of the Project. Hyundai explained to Mr Lee that the rate was too high and negotiated for a rate of S$1.70/m3. Hyundai and KSE agreed on this rate. Mr Lee then told Mr Nam that KSE could not accept Backho’s rate of S$1.90/m3 since KSE had contracted to transport sand at S$1.70/m3, ie, KSE would be making a loss at S$1.90/m3. Mr Lee also allegedly told Mr Nam that Chuan Lim Construction Pte Ltd (“Chuan Lim”) had offered a rate of S$1.45/m3 for the same works. Mr Lee, therefore, proposed to Mr Nam for the transportation of the sand at a rate of S$1.50/m3 (the “Agreed Volume Rate”) and Mr Nam orally agreed (the “Alleged Oral Agreement”). Hence, the Alleged Oral Agreement was concluded shortly after the Second 4 February 2020 Quotation was rejected.

Backho denies that the Alleged Oral Agreement was concluded for the transportation of sand at a rate of S$1.50/m3. Hence, Backho continued to perform its obligations under the previously concluded contract as evidenced by the 30 August 2019 Quotation and the First 4 February 2020 Quotation: it continued to supply KSE the stipulated equipment and manpower at the rates set out in those two quotations for the period of September 2019 to November 2019.

Alleged goodwill payments

KSE claims that although the Alleged Oral Agreement was concluded, it nevertheless agreed out of goodwill to pay Backho on time-based rates for a limited period of time.

KSE claims that on or around 20 March 2020, Backho started the sand transportation works in accordance with the Alleged Oral Agreement. However, due to the Circuit Breaker and COVID-19 measures, Backho’s work did not continue for long and it had to discontinue its sand transportation works from 6 April 2020 to 19 September 2020.

When the works started on or around 20 March 2020, the dredging volume was very low during that period. There was not enough volume of sand to be transported to justify using Backho’s equipment on site. KSE then agreed, out of goodwill, to pay using time-based rates for a very limited duration.

When the works resumed in September 2020, after the lifting of the Circuit Breaker, KSE informed Backho that the previous payments using time-based rates would no longer apply since Backho had previously been paid only because of the issues with the low dredging quantity at that time.

However, as the works had just resumed after the COVID-19 restrictions earlier, the dredged quantity was still low in late September. Based on further discussions between the parties in September 2020, KSE agreed to pay Backho using time-based rates for the rental of equipment from 20 September 2020 to the end of October 2020. KSE explained that this was because the works commenced from 20 September 2020, and it would take some time for Backho to mobilise its equipment before actually carrying out its works. If the works were charged on a volume basis, Backho would have earned significantly less revenue. Hence, KSE claims that it made payments to Backho on time-based rates purely out of goodwill, in view of the slower dredging works caused by the impact of the COVID-19 measures. In this way, Backho could still earn reasonable revenue in the interim.

KSE claims that it informed Backho that starting from 1 November 2020, KSE would revert to paying Backho based on the previously Agreed Volume Rate of S$1.50/m3 pursuant to the Alleged Oral Agreement. KSE maintains that the Alleged Oral Agreement exists as Backho issued Progress Claim No 1 dated 5 January 2021 (“Progress Claim 1”) using a volume-based rate for work done in November and December 2020.

Subsequent events in 2021

KSE claims that Backho abandoned the contract on or around 14 February 2021. Backho denies this allegation and claims that it was KSE that wrongfully repudiated their contract.

Subsequently, on 27 February 2021, Backho issued a total of six invoices using a time-based rate under the 30 August 2019 Quotation and the First 4 February 2020 Quotation for work done in November 2020, December 2020, and January 2021.

The AD

On 31 May 2021, Backho served on KSE a payment claim, “Payment Claim Reference No. 2” for work done from 30 August 2019 to 31 May 2020 (“Payment Claim 2”). The sum claimed therein was $1,102,042.21.

On 14 June 2021, KSE served its Payment Certificate in response to Payment Claim 2. In it, KSE stated as follows:

On 25 June 2021, Backho then lodged AA 165 based on KSE’s non-payment in respect of Payment Claim 2. In the adjudication proceedings, KSE argued, inter alia, that there was no “contract that [was] made in writing” under s 4(3) of the SOPA, for two reasons:

(a) First, KSE submitted that the 30 August 2019 Quotation and the First 4 February 2020 Quotation were not signed by KSE because the terms of payment were not agreed to by KSE.

(b) Second, KSE contended that the parties had instead entered into an oral agreement “some time in February 2020” for work to be done by Backho at a volume-based rate of S$1.50/m3 of sand transported. KSE submitted that this oral agreement does not fall within any of the categories in s 4(3) of the SOPA as a contract in writing. Thus, the SOPA is not applicable to oral contracts and Backho cannot enforce payments based on an oral contract via the SOPA.

The adjudicator, Mr Tay Peng Cheng (the “Adjudicator”), rendered the AD on 27 July 2021. In the AD, he determined, inter alia, that KSE was to pay Backho a sum of $716,842.21 (inclusive of 7% GST) (the “Adjudicated Sum”). In coming to this decision, the Adjudicator found, inter alia, that:

(a) Pursuant to s 4(3) of the SOPA, there was a single contract in writing between the parties, evidenced by the 30 August 2019 Quotation and the First 4 February 2020 Quotation. The First 4 February 2020 Quotation was an “amendment or variation” of the 30 August 2019 Quotation. He noted that “both quotations had referred to the Tuas West Coast project, and both were essentially for the “Rental of Heavy Equipment”, which was also the subject matter of both quotations”. Also, “[w]hile there were differences in the type of equipment and manpower described under the 2 quotations, both quotations were, at their core, for the supply of equipment and manpower for works to be carried out at the same Tuas West Coast site.”

(b) He was not convinced that “there was a meeting of minds as to the Alleged Oral Agreement, or that was indeed an oral agreement reached between the parties in February 2020 (or September 2020) under which [Backho] would be paid at a rate of $1.50/m3 of sand transported.”

On 5 August 2021, Backho applied by way of Originating Summons No 790 of 2021 to seek leave to enforce the AD. The learned assistant registrar granted Backho’s application on 6 August 2021 (the “Order”). Service of the Order was effected on 16 August 2021.

On 3 September 2021, KSE commenced the present application to set aside the AD and the Order.

The parties’ cases

The applicant’s case

KSE argues that the AD should be set aside on two separate grounds:

(a) First, the Adjudicator had exceeded his jurisdiction in determining the dispute because Payment Claim 2 and AA 165 were not based on a single contract but were based on two separate contracts instead.

(b) Second, the contract which concluded in February 2020 was “based on an oral contract” that is outside the purview of the SOPA (ie, the Alleged Oral Agreement).

On the first ground, KSE claims that the Adjudicator erred in finding that there was a single contract premised on and evidenced by the 30 August 2019 Quotation, which was then amended or varied by the First 4 February 2020 Quotation. KSE makes the following arguments in support:

(a) First, there was no variation clause in the 30 August 2019 Quotation.

(b) Second, the parties’ conduct evinced an intention to enter into two separate contracts, because:

(i) The 30 August 2019 Quotation and the First 4 February 2020 Quotation arose from separate discussions and they did not bear common references.

(ii) Backho issued separate invoices for the 30 August 2019 Quotation and the 4 February 2020 Quotation.

(c) Third, the works and equipment under the 30 August 2019 Quotation and the First 4 February 2020 Quotation were very different and distinct.

On the second ground, KSE claims that there was an oral contract similar to the Second 4 February 2020 Quotation, except for the applicable volume rate, which was concluded after the First 4 February 2020 Quotation and the Second 4 February 2020 Quotation were issued. KSE claims that this is supported by: (a) the parties’ correspondence at the material time; and (b) Backho’s conduct. KSE further argues that the Adjudicator failed to adequately consider the timing and circumstances of KSE’s payments of the invoices allegedly issued under the First 4 February 2020 Quotation.

KSE submits that, if any of the two grounds is proven, Backho’s payment claim does not come within the provisions of the SOPA and the SOPA does not apply to this case. Thus, the Adjudicator had no jurisdiction to adjudicate Backho’s payment claim.

As noted above (at [26]), KSE had filed the present application on 3 September 2021. Pursuant to O 95 r 2(4) of the ROC, the stipulated 14-day period, which ran from the date of service of the Order on 16 August 2021, ended on 30 August 2021. KSE argues as follows:

(a) The stipulated 14-day period was not a mandatory deadline under O 95 r 2(4) of the ROC; hence, the application was not filed out of time.

(b) In the alternative, if the 14-day period was a mandatory deadline, KSE should be granted an extension of time to file the present application.

The respondent’s case

Backho claims KSE’s arguments as set out above on setting aside the AD and the Order are unmeritorious.

In respect of KSE’s first ground, Backho submits that the Adjudicator had correctly found that the works pertaining to the 30 August 2019 Quotation and those pertaining to the First 4 February 2020 Quotation were not “vastly different”. On the contrary, the latter was an extension of the former. In this regard, the Adjudicator had correctly reasoned that:

(a) the nature of the works required under the two quotations was similar;

(b) the works pertaining to the two quotations were for the same project; and

(c) KSE admitted that the excavator supplied under the 30 August 2019 Quotation was also used for the works which was the subject matter of the First 4 February 2020 Quotation. This showed the similarity of the works required under the two quotations.

Moreover, Backho submits that the Adjudicator also correctly reasoned that the following were not determinative that the 30 August 2019 Quotation and the First 4 February 2020 Quotation were two separate contracts:

(a) the fact that the First 4 February 2020 Quotation did not incorporate words like “variation” or “additional works”; and

(b) the difference in how the invoices pertaining to the 30 August 2019 Quotation and those pertaining to the First 4 February 2020 Quotation were numbered.

In respect of KSE’s second ground, Backho submits that the Adjudicator had correctly found, after considering the extant evidence, that the Alleged Oral Agreement did not exist.

Backho further claims that this application to set aside the AD is a disguised appeal against the Adjudicator’s findings which is prohibited by SOPA. Thus, the present application was an abuse of the court’s process and the application should be dismissed.

Backho also argues that KSE’s application was filed out of time and should be dismissed on that ground.

Issues

Issues determined at the hearing

At the hearing on 29 November 2021, I heard the parties’ arguments on the issues pertaining to whether KSE’s setting aside application was filed out of time:

(a) First, did O 95 r 2(4) of the ROC provide that the setting aside application must be filed within 14 days of the service of the Order?

(b) Second, if KSE’s setting aside application was filed out of time, should KSE be granted an extension of time?

As regards the first issue, KSE submitted that the 14-day period stipulated in O 95 r 2(4) was merely advisory and therefore not mandatory. Central to this submission was that O 95 r 2 provides that the debtor “may” apply to set aside an adjudication determination within 14 days of being served with the order granting leave to enforce the adjudication determination. KSE argued that the use of the word “may” as opposed to words such as “must” or “shall” meant that the 14-day period was not mandatory. If the debtor adheres to this timeline, he benefits from having an automatic stay of enforcement of the order granting leave. With the greatest respect, this is a misreading of the provision. The use of the word “may” connotes that the debtor can elect to set aside the AD within 14 days of being served of the order granting leave. It did not mean that the debtor can choose to adhere to this stipulated period. Indeed, in Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd [2015] 1 SLR 797 (“Citiwall”), the Court of Appeal referred to the 14-day period under O 95 r 2(4) as a “time limit” (at [29(d)]), which the court considered to be in keeping with the scheme of expeditious resolution under the SOPA. I therefore held that, since KSE’s application was filed past the stipulated 14-day period, it was filed out of time and leave of the court was required to proceed with the application to set aside the AD.

As regards the second issue, KSE relied on the principles set out in Frontbuild Engineering & Construction Pte Ltd v. JHJ Construction Pte Ltd [2021] 4 SLR 862 (“Frontbuild Engineering”) at [28]:

KSE submitted on the above considerations in turn:

(a) With respect to the length of delay, the court in Frontbuild Engineering granted an extension of time for a two-month delay. A fortiori, an extension of time should be granted for the present four-day delay.

(b) With respect to the reason for the delay, the present delay was due to KSE’s disruption in cashflow caused by the COVID-19 situation. Hence, KSE had difficulties in paying the Adjudicated Sum into court for its setting aside application.

(c) With respect to the merits of the setting aside application, KSE submitted that it has proffered several valid reasons in respect of its application, which form the subject matter of the present case.

(d) With respect to whether prejudice was caused to Backho, KSE submitted that Backho suffered no prejudice by the short delay of four days.

Backho submitted in response that: (a) KSE’s explanation for its delay was inadequate; (b) it suffered prejudice in the form of further delays to the restoration of its cash flow; and (c) an extension of time would contravene the legislative intent of the SOPA. Backho further submitted that Frontbuild Engineering should be distinguished because: (a) the court did not deal with the principle of temporary finality there; (b) the facts of that case involved a defective order that granted leave to enforce the adjudication determination while the Order in the present case was validly served.

At the hearing, I pointed out that the court in Frontbuild Engineering need not have articulated the principle of temporary finality where such a consideration was a given in the context of the SOPA. Indeed, I should add here that if the court in Frontbuild Engineering was not advertent to the consideration of temporary finality, why did it consider the length and reasons for the delay in filing the setting aside application? I also pointed out that, on Backho’s reasoning, the court would never be allowed to grant even an extension of a day. This cannot be the case. I also add here that Backho’s attempt at distinguishing Frontbuild Engineering is, with the greatest respect, unmeritorious. The court there ultimately found that the defect in the order was an “irregularity” falling within O 2 r 2(1) of the ROC and exercised its curative discretion to rectify that defect (at [27]). Hence, it is not necessary to examine if a defective order in that case is a distinguishing factor since the respondent’s alleged distinguishing factor did not even exist.

In my view, in examining an application for an extension of time, the foremost considerations must be whether the applicant had a good reason for the delay and whether prejudice has been caused to the respondent. In the present case, I accepted that the delay of four days in filing the present application was due partly to the COVID-19 situation, which in turn created problems for KSE in raising the Adjudicated Sum to be paid into court which is a mandatory requirement. Moreover, having regard to the parties’ submissions, I found that there was no substantial prejudice to Backho as the delay was only for four days. Hence, I granted KSE an extension of time.

I shall now turn to the issues to be determined in this judgment.

Remaining issues to be determined

The following issues are to be determined:

(a) Is KSE’s application to set aside the AD a disguised appeal against the Adjudicator’s findings and therefore an abuse of the court’s process?

(b) Were there one or two contracts that the Adjudicator should have considered in AA 165?

(c) Did the Alleged Oral Agreement exist?

My decision

The applicable law

Before examining the substance of the matter proper, I pause to note the Adjudicator’s holding on the applicable law in the AD:

Section 25(2) of the Building and Construction Industry Security of Payment (Amendment) Act 2018 (Act 47 of 2018) (the “SOPA Amendment Act”) states as follows:

The rest of the subsections under s 25 of the SOPA Amendment Act concern the situation where the payment claim was served before the current version of the SOPA came into force. Here, as stated above (at [47]), Payment Claim 2 was served after that date. Hence, I agree with the Adjudicator’s holding that save for s 10, all other sections of the SOPA presently in force shall apply in the determination of the present case.

Is KSE’s present application a disguised appeal and an abuse of the court’s process?

Backho submits that KSE’s present application “is a deliberate abuse of the court's process and a deliberate disguised appeal on the merits of the [l]earned Adjudicator's findings”.

Sections 27(5) and 27(6) of the SOPA state as follows:

Backho submits that the nature of a setting aside application under s 27(5) is “not an appeal on the merits of the adjudicator’s findings”. Backho relies on, inter alia, the Court of Appeal’s statement in Citiwall at [48]:

Yet, as can be seen from the above, that authority clearly states that the court is entitled to examine issues relating to the adjudicator’s jurisdiction. Indeed, arguments relating to an adjudicator’s jurisdiction do not touch on the merits of the adjudicator’s decision on the substantive dispute.

In the present case, KSE’s arguments regarding the Adjudicator’s findings relate to the latter’s jurisdiction in determining the substantive dispute in AA 165. As stated above (at [27]), KSE contends, in essence, that the Adjudicator had exceeded his jurisdiction.

However, Backho appears to suggest in the extreme that the court should not consider the findings of the Adjudicator at all since they purportedly touch on the merits of his decision. This is a misunderstanding of the applicable law set out above. To the extent that the Adjudicator had made findings pertaining to his jurisdiction, the court is entitled to review such findings. This is an exercise of the court’s supervisory jurisdiction, which refers to “the inherent power of the superior courts to review the proceedings and decisions of inferior courts and tribunals or other public bodies discharging public functions”: see Citiwall at [41]–[45]. Indeed, this proposition is succinctly explained in Chow Kok Fong, Security of Payments and Construction Adjudication (LexisNexis, 2nd Ed, 2013) at para 19.9 (cited with approval in Citiwall at [45]):

Hence, KSE’s present application is neither a disguised appeal nor an abuse of the court’s process. I shall now turn to examine the grounds of KSE’s application.

Was AA 165 premised on one or two contracts?

The applicable law

As stated in Rong Shun Engineering & Construction Pte Ltd v CP Ong Construction Pte Ltd [2017] 4 SLR 359 (“Rong Shun”) at [38], the SOPA “mandates that one adjudication application be founded on one payment claim which arises from one contract” [emphasis in original]. Indeed, this position was stated by the Court of Appeal in Civil Tech Pte Ltd v Hua Rong Engineering Pte Ltd [2018] 1 SLR 584 as well (at [65]–[68]):

The legal position set out above is well-established and uncontentious. I shall now turn to my findings on this issue.

My findings

In the AD, the Adjudicator held as follows:

KSE submits that the Adjudicator had erred in coming to his findings, for the reasons set out above at [28]. I reproduce them here for ease of reference:

(a) First, there was no variation clause in the 30 August 2019 Quotation.

(b) Second, the parties’ conduct evinced an intention to enter into two separate contracts, because:

(i) The 30 August 2019 Quotation and the First 4 February 2020 Quotation arose from separate discussions and they did not bear common references.

(ii) Backho issued separate invoices for the 30 August 2019 Quotation and the 4 February 2020 Quotation.

(c) Third, the works and equipment under the 30 August 2019 Quotation and the First 4 February 2020 Quotation were very different and distinct.

Whether the AD was premised on a payment claim that arose from one or two contracts turns on the central issue of ascertaining the parties’ objective intentions. In Rong Shun, the High Court was faced with the same issue: whether the adjudicator had acted in excess of his jurisdiction because he had, inter alia, adjudicated on a payment claim which did not arise from a single contract. In determining that the payment claim arose from a single contract comprising two scopes of work, the court examined the parties’ objective intention when the applicant accepted the respondent’s counteroffer during their negotiations: Rong Shun at [76], [81] and [91].

Hence, I shall first address KSE’s submissions before moving on to the crux of my analysis: did the parties intend for one or two contracts to be concluded from the 30 August 2019 Quotation and the First 4 February 2020 Quotation?

(1) The lack of a variation clause in the 30 August 2019 Quotation

KSE submits that because the 30 August 2019 Quotation does not contain a variation clause, having regard to “well-established legal principles on variations”, the First 4 February 2020 Quotation “cannot be said to be a variation of the 30 August 2019 Quotation”. Hence, KSE submits that “the Adjudicator’s determination is inconsistent with contractual legal principles including those governing amendments or variations to a construction contract”.

In my view, KSE’s submission is premised on a misunderstanding of the present legal context.

KSE relies on Chow Kok Fong, Law and Practice of Construction Contracts vol 1 (Sweet & Maxwell, 5th Ed, 2018) (“Law and Practice of Construction Contracts”) at paras 5.001 and 5.017 in support of its submission:

Relying further on Law and Practice of Construction Contracts, KSE submits as follows:

The present dispute does not concern whether there was a variation order issued by any party. If there was a clause that enabled variations of the scope of works to be ordered, the issue then is whether the parties were vested with the power under the terms of a construction contract to be able to order a subsequent variation of the works unilaterally. In contrast, the material issue here is whether the parties had agreed to amend or vary the construction contract. This concerns the parties’ objective intentions. Indeed, these two distinct situations are implicitly acknowledged in KSE’s own submission as set out above (at [65]).

Hence, it cannot be said that the Adjudicator had disregarded the applicable law regarding contractual variations in the context of construction contracts. Instead, it was KSE who misunderstood the applicable legal context. I therefore reject KSE’s submission that the lack of a variation clause means, ipso facto, that the First 4 February 2020 Quotation cannot be a variation of the 30 August 2019 Quotation.

(2) Were the works pertaining to the 30 August 2019 Quotation and those pertaining to the First 4 February 2020 Quotation different?

As elucidated above (at [58]), the Adjudicator found that in respect of the 30 August 2019 Quotation and the First 4 February 2020 Quotation, “both quotations were, at their core, for the supply of equipment and manpower for works to be carried out at the same Tuas West Coast site”. KSE takes issue with this finding.

KSE submits that the works pertaining to the 30 August 2019 Quotation and those pertaining to the First 4 February 2020 Quotation are “very different and distinct”. In essence, KSE contends that the former pertained to sea-based works while the latter pertained to land-based works.

(a) The 30 August 2019 Quotation provided for the rental of one Super Long Arm Excavator with an operator and a sieving bucket (see [5] above). It was to be used on board a vessel at sea. This excavator was used to remove debris from the seabed, such as tree trunks, tyres and other rubbish, and to load the debris onto a barge.

(b) In contrast, the First 4 February 2020 Quotation provided for the rental of excavator equipment (including one Super Long Arm Excavator), dump trucks, LED lighting tower and automotive diesel oil, together with operators, a driver, four banksmen and two site supervisors (see [6] above). These equipment were used to transport dredged sand on land to a different part of the Project.

KSE argues that since the works pertaining to the First 4 February 2020 Quotation were done on land, there was no need for a grab attachment or a sieving bucket to be supplied, which were options under the 30 August 2019 Quotation (see [5] above) for use on board a vessel at sea. Moreover, KSE contends that the works for the First 4 February 2020 Quotation were more complex and required a team of workers as stated above.

Backho rejects KSE’s submissions that the works pertaining to the 30 August 2019 Quotation were sea-based works. It submits instead that the Super Long Arm Excavator was not loaded onto any barge or vessel and was not used to pick up debris from the seabed. Rather, it was used “to excavate the marine soil on land as part of the [Project]”.

At the hearing, the parties did not dispute that the Super Long Arm Excavators supplied under the two quotations were different ones. In other words, KSE was supplied with two separate Super Long Arm Excavators. However, I note that the rates pertaining to these two excavators were different. I set out the pertinent extracts of the two quotations below:

In my view, whether the nature of the works pertaining to the two quotations were similar or different and whether the rates pertaining to the Super Long Arm Excavator quoted therein were the same or different have little relevance in determining the intention of the parties to enter into one contract or two contracts.

Consider a hypothetical situation where A contracts with B for B to supply the cars and drivers needed to transport VIP attendees to an international conference. It would be artificial to view each rented car and accompanying driver as a separate contract between A and B unless the contractual parties clearly states that each car rented is a separate contract. Instead, it would more likely be the case that such instances are terms of a single contract between A and B. To make this analogy closer to the facts of the present case, suppose the initial terms of the single contract stipulated that the drivers are to only transport the VIP attendees to the conference. Subsequently, A and B agree that A would rent more cars and drivers to transport some additional VIP attendees back to their places of residence or even to other locations upon their request. This additional arrangement would constitute a different scope of work which nevertheless relates to the same contract. A and B also agree that these drivers are to be more handsomely remunerated for their efforts. These additional facts alone neither indicate that the additional arrangements are made pursuant to a variation of the previous contract, nor imply that it is made pursuant to a separate contract. Rather, as I have stated earlier (see [60] above), this issue must turn on the parties’ objective intention at the material time.

Hence, I place little weight on the parties’ submissions on the nature and scope of works relating to the 30 August 2019 Quotation and the First 4 February 2020 Quotation. I shall turn next to the substance of the analysis: what did KSE and Backho objectively intend at the material time? Did KSE and Backho intend to have a separate contract each time KSE rented an equipment for the Project?

(3) The parties’ objective intention

KSE submits that the parties’ conduct evinced an intention to enter into two separate contracts arising from the 30 August 2019 Quotation and the First 4 February 2020 Quotation. Its submission relies on two arguments (see [28(b)] above):

(a) The 30 August 2019 Quotation and the First 4 February 2020 Quotation arose from separate discussions and they did not bear common references.

(b) Backho issued separate invoices for the 30 August 2019 Quotation and the 4 February 2020 Quotation.

In respect of KSE’s first argument, KSE relies on the authority of Rong Shun, where the court dealt with the issue of whether a payment claim arose from a single contract. In that case, the High Court found that the parties’ conduct evinced an intention to enter into one contract comprising two scopes of work. The court had regard to the following facts: (a) the respondent extended a single invitation to the applicant to tender for two scopes of work; and (b) the two quotations bore the same reference number as well as same heading which referred to the main contract between the respondent and the Housing and Development Board. The court stated as follows (at [76]–[81]):

KSE submits that in contrast, the 30 August 2019 Quotation and the First 4 February 2020 Quotation bore distinct reference numbers and also did not refer to a single main contract. Also, the quotations in the present case were made pursuant to requests at different points in time and not pursuant to a single invitation to tender. KSE argues that, even on Mr Nam’s evidence, the 30 August 2019 Quotation was issued pursuant to a discussion on 30 August 2019 while the First 4 February 2020 Quotation was issued after separate discussions in early February 2020. Also, in Backho’s e-mail dated 4 February 2020 which attached the First 4 February 2020 Quotation, Backho did not refer to the earlier 30 August 2019 Quotation or the works undertaken thereunder and did not mention the word “variation”. Backho wrote in that e-mail as follows:

Hence, in KSE’s view, the contents of the e-mail were consistent with the parties negotiating a new contract.

In my view, the absence of the factors in Rong Shun (which KSE points out above) in the present case does not immediately imply that there are two contracts instead of one. KSE misunderstands the substance of the court’s analysis in Rong Shun.

In Rong Shun, the court first examined the issue of whether the respondent had extended a single or separate invitation to the applicant to tender for two scopes of work (at [77]). This is an examination of whether there was an overarching agreement for a single contract between the parties. The court found that there was no contemporaneous documentary evidence in support. The court then considered the applicant’s evidence (presumably non-written) that it had extended a single invitation to the respondent to tender for two scopes of work, which the court found was consistent with other parts of the respondent’s evidence (at [77]). In the present case, this court undertook this analysis before examining the plain wording of the quotations (at [78]–[80]) to decipher whether the parties had intended to have one continuous contract for the two quotations or the parties intended to have two separate contracts from the two quotations. This analysis of the parties’ intention is largely fact driven.

Likewise, in the present case, I first examine whether there was contemporaneous documentary evidence to reveal the intention of the parties at the material time of the 30 August 2019 Quotation and the First 4 February 2020 Quotation. At the hearing, the parties agreed that there was no such written evidence pertaining to discussions in August 2019 or February 2020. However, before examining the plain wording of the 30 August 2019 Quotation or the First 4 February 2020 Quotation, I shall examine the parties’ testimony as to whether there was an overarching agreement for a single contract between the parties. At the hearing, KSE agreed with my approach:

In my view, there is indeed such an overarching agreement on the facts. Having examined both Mr Lee’s and Mr Nam’s evidence, it is clear that Backho was to supply all requisite equipment to KSE to perform its excavation works under the Project, because KSE did not have such equipment.

Mr Nam stated as such in his affidavit:

In contrast, Mr Lee’s version of the events was that, as regards the works under the First 4 February 2020 Quotation, Backho was selected over another available subcontractor to carry out the works under this “entirely different contract”:

As can be seen from the above, Mr Lee explained that: (a) Backho was to carry out “excavation works”, ie, a broad and all-encompassing head of work, under the First 4 February 2020 Quotation; (b) KSE and Backho had a “trusting working relationship at that time”; and (c) Backho was selected over a subcontractor which had allegedly provided a cheaper rate. Mr Lee also took pains to further emphasise the magnitude of the works under the First 4 February 2020 Quotation.

To begin with, implicit in Mr Lee’s explanation was that KSE was in need of a substantial degree of manpower and equipment to carry out the works in the Project, at least at the time of negotiating the First 4 February 2020 Quotation. As a contractor, KSE must have naturally known, at the outset, about what they would require in order to execute the works in the Project. Hence, this corroborates Mr Nam’s evidence that KSE needed a huge amount of manpower and equipment at least at the time of the 30 August 2019 Quotation.

Hence, considering the two different narratives before me, the more credible narrative has to provide a better account of KSE’s need and willingness to employ Backho to conduct large-scale excavation works for the Project over a cheaper subcontractor and the parties’ good ongoing working relationship at the time of the First 4 February 2020 Quotation, bearing in mind that KSE would have known of such a need at the outset of the Project. In my view, on a balance of probabilities, it was Mr Nam’s narrative that is more convincing. In the absence of contemporaneous written evidence, it is more probable and is in keeping with good commercial sense that the parties had already agreed for Backho to provide KSE with all the necessary equipment and manpower for excavation work for the Project at the time of the 30 August 2019 Quotation. Hence, the First 4 February 2020 Quotation indicated a variation of a single previously concluded contract for the support and supply of equipment and manpower for the Project starting from the 30 August 2019 Quotation.

With such an overarching agreement for Backho to supply all the requisite equipment, the subsequent ancillary issues, such as whether the quotations bear a common reference or whether they bear the word “variation”, are patently trivial. This was simply the case that KSE needed more equipment for the works in the Project in February 2020 and Backho was happy to supply them on top of the previously supplied equipment in August 2019. Hence, the parties intended a single contract contained within the 30 August 2019 Quotation and the First 4 February 2020 Quotation. In other words, the different rates for the two separate Long Arm Excavators across these two quotations, along with the rates pertaining to the additional equipment and manpower supplied under the First 4 February 2020 Quotation, are different terms of the same contract.

Hence, with the greatest respect, KSE has not fully appreciated the approach taken by the court in Rong Shun. On the contrary, my analysis is consistent with the approach in Rong Shun and the general principles pertaining to contractual interpretation ie to establish the intention of the parties in the contract.

I shall turn next to KSE’s second argument, which is that Backho had itself treated the 30 August 2019 Quotation and the 4 February 2020 Quotation as separate contracts by issuing two different sets of invoices for each of them.

For the invoices in respect of the rental of the Super Long Arm Excavator under the 30 August 2019 Quotation, Backho referred to the reference number of the 30 August 2019 Quotation, “QT/19/08/151/R1”. The invoices were also expressly referred to as “claims”, and the claims were numbered sequentially, with separate numbering from the set of invoices/claims in respect of the First 4 February 2020 Quotation: see table below.

For the invoices in respect of the rental of equipment under the First 4 February 2020 Quotation, Backho referred to the different reference number, ie, that of the First 4 February 2020 Quotation, “QT/20/02/025”. There was no reference to the earlier 30 August 2019 Quotation. The invoices were submitted as sequential claims, separately numbered from the set of invoices issued in respect of the 30 August 2019 Quotation: see table below.

Where Backho omitted to state the reference number of the First 4 February 2020 Quotation but sought to claim works under that quotation, the claims did not include the claims for works under the 30 August 2019 Quotation and continued to be sequential claims following from the earlier set of claims under the First 4 February 2020 Quotation (ie, continuing from Claim No 6 in the table above at [92]): see table below.

In addition, KSE highlights that, as can be seen from the tables above, there were several instances where two separate invoices for each quotation were even issued and dated the same day – ie, one based on the 30 August 2019 Quotation, and the other based on the First 4 February 2020 Quotation.

KSE submits that the above evidence shows that Backho itself intended for the 30 August 2019 Quotation and the First 4 February 2020 Quotation to be distinct transactions and contracts.

To recapitulate, I have found above (at [87]–[88]) that there was an overarching agreement for Backho to supply all the necessary equipment for KSE to carry out its works under the Project. In the circumstances, the organisation of the invoices is simply a matter of convenience for Backho. There is also much clarity and transparency in billing KSE who would appreciate how the amount in the invoices were derived. I therefore agree with the Adjudicator’s finding that “the numbering of the invoices is an administrative issue, and what is more relevant is the substance behind the invoices and the conduct of the parties, and not the form of the invoices” [emphasis added]. Hence, I place little weight on KSE’s submissions regarding the form of the invoices above.

KSE alleges that there was an Alleged Oral Agreement with Backho which was concluded around February 2020 to charge based on the volume of earth excavated instead of the time-based rental of equipment and manpower for the Project. Backho admitted that there was a discussion but there was no agreement as the parties could not agree on the rate. I shall discuss this issue of the Alleged Oral Agreement in greater detail below. However, this event is relevant for the purpose of determining whether the parties intended to have a single contract or two contracts from the two quotations. KSE submits that the Alleged Oral Agreement is similar to and was concluded pursuant to negotiations for the Second 4 February 2020 Quotation. As I have stated above (at [87]), it makes no commercial sense to operate the 30 August 2019 Quotation on a time-based rate independently and concurrently with the Alleged Oral Agreement. This reasoning applies a fortiori to the Alleged Oral Agreement, which was priced based on the volume of earth excavated for works in the Project, as opposed to the time-based rental of equipment in the First 4 February 2020 Quotation. Hence, on KSE’s argument, it would have been logical for the Alleged Oral Agreement to supersede the 30 August 2019 Quotation and the First 4 February 2020 Quotation. This implies that KSE and Backho contemplated their business association in the Project as one contractual relationship before this case went for adjudication.

(4) Conclusion on whether AA 165 was premised on one or two contracts

For the above reasons, I find that there was only one applicable contract on the facts. From my finding that there was an overarching agreement for Backho to supply all the necessary equipment for KSE to carry out its works under the Project (at [87]–[88]), the First 4 February 2020 Quotation indicated a variation of a single previously concluded contract. Hence, I dismiss KSE’s first jurisdictional objection that AA 165 was premised on two different contracts and hold that the Adjudicator did not act in excess of his jurisdiction on this ground.

Did the Alleged Oral Agreement exist?

The applicable law

The SOPA expressly states that its provisions shall apply to contracts that are “made in writing”. Sections 4(1), 4(3) and 4(4) of the SOPA provide as follows:

Indeed, the above position is clearly stated by the court in Metropole Pte Ltd v Designshop Pte Ltd [2017] 4 SLR 277 at [109]: “… it is a jurisdictional requirement that the adjudicator’s determination be based on a written contract. The court is therefore entitled to look into the merits of the adjudicator’s decision in this respect.”

I shall now turn to my findings on this issue.

My findings

As stated above (at [29]), KSE claims that the Alleged Oral Agreement was based on the Second 4 February 2020 Quotation after the First 4 February 2020 Quotation was rejected. It seems that KSE submits that the Alleged Oral Agreement was to significantly change the approach towards the Project from a time-based rental of equipment and manpower to a rate based on the volume of earth excavated. As I have explained above (at [97]), on KSE’s case, it would make no commercial sense for the volume-based arrangement in the Alleged Oral Agreement not to apply to the 30 August 2019 Quotation. KSE had not provided any explanation or evidence that the Alleged Oral Agreement would not apply to the 30 August 2019 Quotation. This point therefore weakened KSE’s allegation that there was an Alleged Oral Agreement.

KSE claims that the existence of the Alleged Oral Agreement is supported by: (a) the parties’ correspondence at the material time; and (b) Backho’s conduct. KSE further argues that the Adjudicator failed to adequately consider the timing and circumstances of KSE’s payment of the invoices allegedly issued under the 30 August 2019 Quotation and the First 4 February 2020 Quotation.

I shall address KSE’s submissions in turn.

(1) The parties’ correspondence

KSE submits that the parties’ correspondence at the material time supports its claim that the Alleged Oral Agreement was concluded after the Second 4 February 2020 Quotation was rejected (see [10]–[11] above).

On 3 September 2020, Mr Kim Sun Jun (“Mr Kim”), KSE’s then Project Manager, sent the following text message to Mr Nam:

According to KSE, since the above text message states that “… our management also wants to make a unit price contract with you”, it therefore suggests that there was no previously concluded contract using a volume-based rate. However, Mr Lee has explained that a more accurate translation would be: “[p]reviously, work was not smooth, so we just had proceeded with a charter, however, our headquarters likewise wants the unit base contract”. Mr Lee contends that there was a translation error since the word “make” does not exist in the Korean text but somehow has been included in the erroneous English translation. Hence, the Adjudicator would have been confused by this translation and influenced by it into concluding that the Alleged Oral Agreement did not exist at the time this text message was sent. KSE also submits that there was no need for KSE to inform Backho that it could “guarantee 5,000m3 per day and 120,000m3 per month”, which refers to the volume quantity of dredged sand, if there was no prior agreement for payment to be by volume, as stipulated in the Second 4 February 2020 Quotation.

On 31 October 2020, Mr Kim sent the following text message to a WhatsApp group chat with Backho:

KSE claims that in the above context, the words “charter to contract” was understood by the parties to mean that after September 2020 and October 2020, the rates would revert from time-based rates to the volume-based rates that had been originally agreed pursuant to the Alleged Oral Agreement (see [18] above). Mr Kim reminded Backho to “manage productivity” because payment was on volume-based rates.

In my view, the above correspondence does not show the existence of the Alleged Oral Agreement.

In respect of Mr Kim’s text message to Mr Nam on 3 September 2020, I do not see how Mr Lee’s alternative translation assists KSE’s case. Mr Lee’s claim that the message should have read, “[p]reviously, work was not smooth, so we just had proceeded with a charter, however, our headquarters likewise wants the unit base contract”, also suggests there was no previously concluded contract which used a volume-based rate. KSE’s act of informing Backho in that message that it could “guarantee 5,000m3 per day and 120,000m3 per month”, which refers to the volume quantity of dredged sand, therefore relates to the negotiation of a new contract’s terms, one which payment would be based on volume instead of time. Given that this negotiation took place in September 2020, many months after the Alleged Oral Agreement was allegedly concluded sometime around 4 February 2020, the above evidence plainly does not assist KSE’s case.

In respect of Mr Kim’s text message on 31 October 2020, the Adjudicator noted that there is no evidence of Mr Nam assenting to this message. With regard to this finding, KSE submits that “it is more significant that Mr Nam did not deny the arrangement” as Mr Nam did not, for instance, “say he was puzzled by the statement” or “question what was the ‘contract’ which the charter was supposed to be changed to”.

Quite apart from the Adjudicator’s reasoning and KSE’s attempted rebuttal of it, I find that Mr Kim’s text message on 31 October 2020 simply does not have much probative value. From a plain reading of the above asserted change from a “charter” to a “contract”, this phrase connotes, at most, a more permanent arrangement between KSE and Backho as opposed to one that is more ad hoc. This is especially the case since the correspondence is between laymen. There is no evidence as to the terms of the “contract” that would allegedly take effect on 1 November 2020 and therefore whether that “contract”, which was vague and ambiguous, was the Alleged Oral Agreement.

Hence, the correspondence above does not support KSE’s case.

(2) Backho’s conduct

KSE then submits that Backho’s own conduct subsequent to KSE’s 31 October 2020 text message from Mr Kim (see [107] above) reinforces the existence of the Alleged Oral Agreement.

On the one hand, KSE alleges that the following evidence shows that Backho had claimed payment for its works done on a volume-based rate in affirmation of the Alleged Oral Agreement:

(a) Consistent with the payment of the works on a volume basis, Backho requested for the survey data on 10 December 2020 so that it could “prepare for submission of the progress claim”.

(b) Backho affirmed the Alleged Oral Agreement by submitting Progress Claim 1 dated 5 January 2021 for the works done in November 2020 and December 2020 using a volume-based rate of S$1.90/m3.

(c) Mr Nam sent Mr Kim a text message on 6 February 2021 to request for the survey data for October 2020, November 2020, December 2020 and January 2021 and requested for payment before Chinese New Year 2021.

On the other hand, Backho submits that it is clear from the WhatsApp correspondence between the parties that even by 13 January 2021, KSE had not provided Backho with the survey data. The WhatsApp messages state as follows:

Hence, any contract premised on a volume-based rate was not concluded by 13 January 2021. The Alleged Oral Agreement therefore could not have been concluded shortly after the Second 4 February 2020 Quotation.

As for Progress Claim 1, Mr Nam explained that from 3 September 2020 to 13 January 2021, there were negotiations between Backho and KSE to revise the agreement concluded on 30 August 2019 to use volume-based rates. However, in considering whether to agree to such an agreement, Backho requested KSE to provide the applicable quantum of earth work. Backho explained that this was why it prepared Progress Claim 1 to “explore” whether KSE would agree to the quantum of the earth work and the rate of $1.90/m3. KSE, however, rejected Backho’s proposed rate, so Backho continued to make claims under the previous time-based rates. Admittedly, it may appear odd that Backho submitted Progress Claim 1 to “explore” the possibility of payment on a volume-based rate. However, it would be even stranger to accept KSE’s version of the events. As the Adjudicator rightly noted, the sums that Backho claimed in Progress Claim 1 for November and December 2020 each was $355,001.70. However, Backho eventually only claimed lesser sums of $195,721.30 for November 2020 and $159,818.38 for December 2020, on a time-based rate under the 30 August 2019 Quotation and the First 4 February 2020 Quotation. Had there been the Alleged Oral Agreement, Backho would have been able to claim higher sums using a volume-based rate in Progress Claim 1 as opposed to a time-based rate under the two aforementioned quotations. I therefore agree with the Adjudicator’s findings that “[i]f there was indeed an agreement reached that [Backho] should be paid based on volume-based rates, there would be little reason for [Backho] to switch back to time-based rates, and claim a lower amount” and that “[t]his therefore militates against a conclusion that such an agreement on volume-based rates was reached”. In any case, in my view, the fact remains that Progress Claim 1 was premised on a rate of $1.90/m3. This rate was unacceptable to KSE as KSE contends that the Agreed Volume Rate was $1.50/m3. Hence, the fact that Progress Claim 1 was submitted on 5 January 2021 shows that the Alleged Oral Agreement did not exist in February 2020.

More broadly, the above evidence (at [114]) is but one aspect of Backho’s conduct. The larger picture was that Backho had sent KSE many invoices from February 2020 to November 2020, which all referred to the 30 August 2019 Quotation and the First 4 February 2020 Quotation (see [91] and [92] above). Pursuant to these two quotations, payment was to be on time-based rates. As the Adjudicator rightly reasoned:

However, as set out above (at [13]–[18]), KSE attempted to explain the above invoices, made on time-based rates, as goodwill payments to Backho. To recapitulate, KSE claims that despite the conclusion of the Alleged Oral Agreement, it paid Backho using time-based rates from 20 March 2020 to the end of October 2020 out of goodwill. This was in light of the disruptions to the works caused by the COVID-19 measures. Thereafter, payments were to revert to the use of a volume-based rate from 1 November 2020 onwards.

I pause to note that KSE has not adduced any direct evidence to show that the above payments were made on a goodwill basis. There is no documentary evidence that KSE told Backho that the payments were made on a goodwill basis. KSE instead invites the court to infer this fact from the circumstances of KSE’s payments to Backho (see [125] below).

Further, in support of the narrative that KSE made goodwill payments, KSE submits that Backho did not issue payment claims on a time-based rate after November 2020. However, on 27 February 2021, two weeks after Backho had allegedly abandoned its works (see [20] above), Backho realised that its claims would be lower using volume-based rates. Hence, Backho issued, at one go, six invoices for works purportedly carried out pursuant to the 30 August 2019 Quotation and the First 4 February 2020 Quotation for the months of November 2020, December 2020 and January 2021 (see Claim Nos 11–13 at [91] and Claim Nos 7–9 at [93] above).

KSE’s submission above is rather far-fetched. KSE claims that Backho’s issuance of six invoices on 27 February 2021 was motivated by a realisation that it could have claimed for higher sums using time-based rates rather than volume-based rates. Yet, there is no evidence to support KSE’s assertion of Backho’s alleged motivation.

In contrast, Backho could satisfactorily explain why it had issued six invoices on 27 February 2021. Backho submits that from 16 March 2020 to 5 May 2021, Backho was consistently chasing KSE for KSE’s outstanding payments for works carried out in September 2020 to January 2021. This submission is supported by WhatsApp correspondence between Mr Nam and Mr Kim:

Pertinently, the last exchange above on 14 February 2021 clearly shows that Backho had not received payments since November 2020. The previous exchange also indicates that Backho was chasing for payments from October 2020 to January 2021. In the circumstances, I find that the contemporaneous issuing of six invoices on 27 February 2021 was motivated by a need to pursue previous payments for Backho’s rental of equipment from October 2020 to January 2021 under the previously concluded contract within the 30 August 2019 Quotation and the First 4 February 2020 Quotation. It was not, as KSE claims, done because Backho realised that its claim would be lower using volume-based rates. In fact, Backho would have been able to claim higher sums using a volume-based rate in Progress Claim 1 as opposed to a time-based rate (at [116] above).

(3) The timing and circumstances of KSE’s payments of the invoices

KSE submits that the Adjudicator had failed to consider the timing and circumstances of KSE’s payments of the invoices purportedly made pursuant to the 30 August 2019 Quotation and the First 4 February 2020 Quotation. KSE submits as follows:

The above submission is simply a bare narration of what KSE asserts to be the true facts pertaining to the present dispute. In the circumstances, I do not see how the Adjudicator had, in KSE’s view, failed to consider the timing and circumstances of KSE’s payments of the aforementioned invoices.

As alluded to above (at [119]), KSE suggests that the court should infer that its payments on a time-based rate were out of goodwill. KSE argues that its payments for the sand transportation works were not for the exact amounts in Backho’s invoices. Instead, KSE made lump sum payments without indicating that they were for the invoices pertaining to the First 4 February 2020 Quotation:

KSE therefore argues that the manner in which it made the above payments shows that KSE neither affirmed the First 4 February 2020 Quotation nor accepted the invoices pertaining to that quotation.

As seen from the evidence above (at [122]), Backho was chasing for payments from KSE from March 2020 to May 2021. During this period of time, the payments on October 2020, November 2020 and January 2021 were effected, but Backho continued to chase KSE for payment. In my view, these lump sum payments can either indicate that:

(a) they were unconnected to the invoices pertaining to the 30 August 2019 Quotation or the First 4 February 2020 Quotation and therefore made on a goodwill basis; or

(b) they were simply insufficient for full payment for moneys due under the 30 August 2019 Quotation or the First 4 February 2020 Quotation.

In the absence of further evidence, the fact that lump sum payments were made to Backho alone does not assist KSE’s case.

(4) KSE has not discharged its burden of proof

In light of the analysis above, KSE has not discharged its burden to prove, on a balance of probabilities, that the Alleged Oral Agreement exists. Rather, I am persuaded that Backho’s conduct indicates strongly that it had sought to claim in the six invoices payments under the contract within the 30 August 2019 Quotation and the First 4 February 2020 Quotation (see [122] above).

(5) Conclusion on the Alleged Oral Agreement

For the above reasons, I dismiss KSE’s second jurisdictional objection that AA 165 was premised on an oral agreement and hold that the Adjudicator did not act in excess of his jurisdiction on this ground.

Conclusion

As stated above (at [38]–[44]), KSE’s present application to set aside the AD was clearly filed out of time as it exceeded the stipulated 14-day period under O 95 r 2(4) of the ROC. This deadline of 14 days is not advisory and KSE had failed to comply with it to set aside the AD. However, I accepted the reasons for non-compliance and there is no substantial prejudice to Backho. Thus, I granted KSE an extension of time.

However, for the above reasons, KSE has not proven any of its two grounds to set aside the AD. My findings are as follows:

(a) In respect of the first ground that there were two contracts, ie, the 30 August 2019 Quotation and the First 4 February 2020 Quotation, I find that there was in fact an overarching agreement for Backho to supply all the necessary equipment for KSE to carry out its works under the Project, the First 4 February 2020 Quotation was a variation and an addition to the 30 August 2019 Quotation. AA 165 was therefore premised on a single contract (see [58]–[98] above).

(b) In respect of the second ground that the Second 4 February 2020 Quotation was an oral agreement, KSE failed to prove that the Alleged Oral Agreement exists. Hence, AA 165 was not premised on an oral contract but on a contract made in writing within the 30 August 2019 Quotation and the First 4 February 2020 Quotation (see [105]–[128] above).

Accordingly, I dismiss KSE’s application to set aside the AD and the Order.