Jaya Sarana Engineering Pte Ltd v GIB Automation Pte Ltd

Judith Prakash J:

[2] The action was tried before Sundaresh Menon JC (“the trial judge”). In his judgment delivered in April 2007, the trial judge made the following findings and orders:

[3] The assessment hearing conducted pursuant to the above orders took place in October 2007 and in January 2008 before Assistant Registrar Chew Chin Yee (“the AR”). In July 2008, the AR decided as follows:

Being dissatisfied with the above decision except as to the award for the cost of AI/275, JSE appealed. I will consider the various heads of appeal in turn.

The total amount claimed by GIB was $324,269.29.

[7] JSE argued that the AR’s decision had been based on the following premises:

[8] In JSE’s submission, these premises were wrong and were not supported by the evidence tendered in court. In relation to the distinction between the work done by GIB’s workers and Tay’s workers, JSE referred to the following:

JSE submitted that since Chee’s evidence was all the workers he supervised did not carry out AI works, the AR had erred when he sought to make a distinction between GIB’s workers and Tay’s workers and then went on to make a finding that only Tay’s workers were used to do the sub-contract works.

[9] JSE next argued that the other witnesses for GIB did not make the distinction which the AR had. In this connection, Tay himself had not said whether the work his workers were assigned to do was part of the AI works or part of the sub-contract works. He did not know the nature of the works that his workers had done: his evidence was that they had simply carried out GIB’s instructions without having had sight of any contractual documents. Gan Chong Hick (“Gan”), GIB’s managing director, who had also testified, had stated that he had instructed Chee to supervise GIB’s workers and Tay’s workers and also to do minor works involving nine AIs. There was therefore a clear inconsistency between his evidence and Chee’s evidence.

[10] Thirdly, the position of Chee that GIB’s workers and Tay’s workers did not carry out any of the AI works was incredible because:

JSE submitted that overall, the evidence of Chee could not be relied upon as it was evasive, incomprehensible and inconsistent with itself and with the evidence of the other witnesses.

[12] I should state that the final argument made by JSE as set out in [11] above is not convincing. There was no evidence that the AI works would be paid for on the basis of the rates charged by Tay’s workers. Further, the fact that the amounts paid to Tay could be set off against the lumpsum owed to JSE under the sub-contract would make it easier to recover those amounts than to claim them from the main contractor for the AI works in respect of which a rate would have to be agreed with the main contractor who was not likely to want to pay high rates.

[13] In response, GIB supported the AR’s findings. It highlighted that the contract sum between it and the main contractor for all work done, including the AI works and the sub-contract works, had been finalised at $560,660. The final account issued by the project consultant valued the AI works at $59,690. Bearing in mind the relatively low quantum of the AI works, counsel submitted that Tay’s workers could not have been employed for such a long period on simply carrying out the AI works. The other main points raised by GIB were:

[15] As stated above, the AR found that substantial amounts of work in relation to the sub-contract works were done by GIB’s workers. This finding was based on the 30 December 2004 certification of the amount of work completed by GIB and on JSE’s acknowledgement that eight workers had been sent by GIB to the site on 18 February 2005 to do JSE’s work. JSE disagreed that it had only completed 20% of the sub-contract work in December 2004 and asserted that GIB’s workers had only done its sub-contract works for two weeks in January 2005. In court, however, its counsel in trying to establish that JSE had done substantially more work put the following question to Gan:

It can be seen therefore that, even on its own case, JSE had completed less than 50% of the work that it had contracted to do. In addition, JSE’s own witness admitted that Chee, who supervised both GIB’s own workers and Tay’s workers, had been on site every day between January and April 2005. Taking that evidence together with the undisputed evidence that Tay’s workers were there during the same period (in fact the evidence was that they were there until about July 2005) and the fact that the accounts of the project showed that in the end GIB was paid only some $59,690 for AI works and this was about ten percent of the total amount paid to GIB for the project, it cannot be denied that GIB must, through its own and Tay’s workers, have completed at least half, if not substantially more, of the sub-contract works.

[16] A difficulty with the AR’s finding was that, as JSE pointed out, Chee had drawn no distinction between the work done by GIB’s own workers and that done by Tay’s workers. There was also some doubt as to whether these two sets of workers had during the period between January and May 2005 worked only on the sub-contract works or had also worked on AI works. Chee claimed that all the work done in this period was shown by coloured markings in a particular sketch. This evidence was, however, not really reliable as his account of when the marks were made conflicted with evidence given by Gan and Tay who had also contributed to the markings.

[21] At the assessment, the AR awarded JSE $18,893 as money owed to it for abortive works. The original claim put forward by JSE for such works was $26,712. Referring to paras 45 and 48 of the judgment of the trial judge, the AR held that JSE would be entitled to damages in respect of works it had done and later had to redo because proper drawings had not been given to it. He then considered the work items claimed by JSE as set out in Venugopal’s affidavit of evidence-in-chief. He held that the description there of the work done showed that JSE was seeking to claim damages for two categories of work done: first the abortive works and second works which JSE claimed was not part of the sub-contract works but which it had carried out on the instructions of the site supervisor. The AR disallowed the claim for works falling in the second category and rejected JSE’s argument that it had done such extra works because there were no approved drawings available and it had not been able to ascertain the actual scope of the sub-contract works.

[22] On appeal, JSE argued that the AR’s award was wrong. First, the sum of $18,893 was incorrect because, even on GIB’s own submissions, the amount due was $19,123. Second, it contended that the original amount of $26,712 should have been awarded and that the AR had made a mistake in holding that the trial judge had directed that JSE would only be entitled to damages in respect of work that it had done, and later had to redo, because of the lack of proper drawings.

[23] Referring to paras 45 to 48 of the judgment, JSE argued that it was not part of the ratio of the trial judge’s decision that JSE was entitled only to damages in respect of work that was aborted because of the lack of proper drawings. Instead the cited paragraphs of the judgment showed that the trial judge had made no attempt to define the meaning of “abortive” work but had only explained that the scope of the assessment was in respect of loss suffered as a result of GIB’s failure to furnish proper drawings to JSE. JSE further submitted that whether or not the work done was “additional” or “abortive” work would really be an exercise in semantics. Since the trial judge made no attempt to define the meaning “abortive” work, it was his intention that the scope of the assessment should include all work which had to be done or redone as a result of the breach by GIB in failing to furnish proper drawings to JSE. In this regard, Venugopal had given evidence that each and every item claimed in his affidavit was caused by GIB’s failure to furnish proper drawings to JSE. Thus, all that work fell within the relevant category and the full sum of $26,712 should be allowed.

[24] In response, GIB submitted that the AR had correctly excluded the additional items as he had made close reference to and been guided by the judgment of the trial judge. In addition, the AR had expressed the view that the additional works might not be properly classified as “damage” arising from GIB’s breach in failing to provide proper drawings. It was at most work for which JSE might be able to claim against GIB independent of the sub-contract works.

[25] In coming to a decision on this part of the appeal, it is necessary to reconsider exactly what was decided by the trial judge. In paras 45 to 48 of his judgment, the trial judge stated:

JSE submitted that the court should have taken the above factors into consideration in respect of costs and should have awarded it full costs on the standard basis.