Hong Cheng Air-Conditioning Engineering Pte Ltd v Wee Siong Engineering Services Pte Ltd

[1] This is a construction claim in respect of materials supplied and services rendered by the plaintiff against the defendant in a Housing and Development Board building project at Yishun Industrial Park B. The Housing and Development Board is not involved in this litigation.

[2] The plaintiff was engaged by the defendant to provide labour as well as materials for the complete mechanical ventilation work. The main contractors were Koh Brothers Building and C.E. Contractor Pte Ltd. They are also not involved in this litigation. The defendant was their subcontractor who, in turn, engaged the plaintiff as its subcontractor.

[4] When the trial commenced before me, the pleadings from both parties were totally inconsistent with the opening statements of counsel. The statement of claim then was a mere two-paragraph statement to the effect that the plaintiff was claiming money due from the defendant for services rendered at the defendant’s request. The case that the plaintiff’s counsel, Mr Tan, sought to make out at trial was more complicated than that. The defence and counterclaim complicated issues because of its reference to a contract made up of several documents of various dates. There was, in short, no consensus as to what was in fact the contract in question. Counsel then applied to amend their respective pleadings and the trial resumed after they had amended their respective cases.

[5] The cases for the plaintiff and defendant respectively were nonetheless presented more complicatedly than they should. In order that the true issues can be appreciated, it is important to first ascertain what the original contract was. Following oral negotiations between Mr Ho, the managing director of the plaintiff and Mr Ng Chee Wee, the managing director of the defendant, the plaintiff submitted a quotation dated 19 September 2000 to the defendant. This quotation was signed by Madam Wee Bee Hua, a director of the defendant. She is also the wife of Mr Ng Chee Wee. After her signature she added the following words in her own hand:

[6] After that, the defendant sent a works order dated 1 November 2000 to the plaintiff incorporating all that was set out in the plaintiff’s quotation. This became known as the “first works order”. In addition to that works order the defendant attached a set of its own terms and conditions of contract. The defendant maintained at the trial that the contract between the plaintiff and defendant “included” the defendant’s terms and conditions. In my view, it does not. The plaintiff’s quotation of 19 September 2000 was a document capable of forming a valid and complete contract if accepted. That was done by Madam Wee’s signature in affirmation. The defendant disputed such a contract because it was written by Madam Wee that it only “signed temporarily”, but I see no commercial meaning in such a phrase and cannot impute any from the circumstances. All that was required to seal the contract was the signature of the defendant in acceptance and its purchase or works order to commence work. The plaintiff, however, had unnecessarily muddied the case from the outset by its failure to identify the contract. Even after the pleadings were amended, it continues to believe that the contract was an oral one made between Mr Ho and Mr Ng “just after they had finished works for the defendant at another project”. This was borne out in paragraph 6 of the Amended Statement of Claim.

[7] The plaintiff then averred that it was prevented from proceeding to complete the work because the work of other subcontractors employed by the main contractors were still in progress. On 11 June 2001 the defendant issued a second works order for work not originally contracted for. This averment was disputed by the defendant who contended that the second works order covered, work originally set out in the plaintiff’s quotation. Its witnesses testified that the second works order was issued to raise the morale of the plaintiff.

[8] But prior to the second works order, that is, on 8 June 2001, there was a meeting between Mr Ho of the plaintiff and Mr Ng of the defendant. What actually transpired is not clear. The only consensus from counsel before me was that the agreement reached at this meeting was that the defendant would take over the balance of the work that had not been completed as at 8 June 2001. Although the plaintiff had been paid various progress payments till date, there were complaints by the defendant regarding the quality and speed of the plaintiff’s work. There was no mention of payment. In the absence of any indication to the contrary, the only conclusion arising from the 8 June 2001 agreement, in the specific circumstances, is that the plaintiff would not be entitled to any payment unless it is for work requested after 8 June 2001. It will be noted that there was no reservation of rights of either party arising from the 8 June 2001 agreement.

[10] The meeting of 8 June 2001 was a crucial event in this case. It is obvious that whatever contract preceded it, the parties had orally agreed to vary their agreement and had subsequently acted largely in accordance with that variation. The quarrel between them that led them all to court arose from the interpretation of the true import of that variation. The persons involved in this oral agreement were Mr Ho Ah Kow the managing director of the plaintiff and Mr Ng Chee Wee, the managing director of the defendant. Mr Ho’s affidavit of evidence-in-chief stated that –

Further on, he continued (at [12]) as follows:

[11] The circumstances referred to were delays caused by the main contractors and other subcontractors. The other person to the oral agreement, Mr Ng Chee Wee, significantly, did not give evidence. There was therefore no one from the defendant who could give evidence to the contrary. In fact, Mr Teo Chye Huat, the defendant’s general manager acknowledged that there was an agreement made on 8 January 2001 to vary the contract and under cross-examination stated that the situation was forced upon them, in the sense that it was inevitable given the circumstances.

[14] I am of the view that additional work had been requested by the defendant after the 8 June 2001 meeting in the form of the second works order (issued on 15 July 2001). It was a request for additional work and not for work already stipulated under the first works order as the defendant contended. Its only basis for saying so was that it issued the second works order merely to “motivate the plaintiff”. From the items specified in the two works orders and the evidence of the plaintiff’s witnesses, especially that of Cheong Yeong Soon, a witness whom I regard as the most reliable from either side, I conclude that the defendant’s contention cannot be accepted. However, Mr Cheong admitted that only 50% of this work was completed. The work involved in the second works order appear to be requested because the defendant was a little too optimistic that it could take back the remaining work entirely from the plaintiff after 8 June 2001. In my view, the variation agreement on 8 June 2001 formed a separate contract and cannot be considered as a lump sum contract to which the doctrine of substantial performance can be applied. There will be judgment for the plaintiff for half the sum of $69,525.00. The plaintiff’s claim for work outside the first and second works orders had not been sufficiently proved and that part of the claim is disallowed.

[15] For the reasons above, and in particular, the absence of evidence from Ng Chee Wee, the defendant’s counterclaim, including the claim for liquidated damages and administrative charges, which were not proved, is dismissed.