High Court · Decided 30 January 2014

Poh Cheng Chew v K P Koh & Partners Pte Ltd and another

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[2014] SGHC 20Case no. Suit No 682 of 2012

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Legal Profession Act 1966

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Lionel Yee JC:
[1] This case raises issues relating to expert determination and breach of contract which arise out of a settlement agreement made between the parties on 12 March 2012 (“the Settlement Agreement”) pursuant to a dispute over renovations works for a property at Sentosa Cove owned by the Plaintiff (“the Property”).
Background facts
[2] The First Defendant is an architecture and engineering firm, whereas the Second Defendant is a building contractor (collectively, “the Defendants”). Mr Koh Kok Peng (“Koh”) is a professional engineer and the principal partner in the First Defendant; Koh also runs the Second Defendant.
[3] On or about 8 April 2010, the Plaintiff engaged the Defendants to carry out additions and alterations (“the A&A Works”) to the Property. The First Defendant provided consulting engineer services for the A&A Works whereas the Second Defendant carried out the A&A Works. A quotation issued on 21 June 2010 (“the 21 June Quotation”) stated the contract price for the A&A Works as $367,800. Subsequent amendments to the scope of works in the 21 June Quotation were made in a revised quotation attached to a letter from the Second Defendant to the Plaintiff dated 20 August 2010 (“the Revised 21 June Quotation”). The contract price, however, remained unchanged and it is not disputed that the Plaintiff has made full payment of the contract price for the A&A Works.
[4] A dispute arose between the parties regarding the A&A Works. The Plaintiff, alleging that the A&A Works were defective and incomplete, commissioned two companies to prepare reports on the A&A Works. The first report dated May 2011 was done by Building Appraisal Pte Ltd (“Building Appraisal”) and described defects in the A&A Works (“the Building Appraisal Report”). The second report dated January 2012 was done by Lee Consultants and identified the discrepancies between the actual “as-built” work on site and the approved plans for the A&A Works (“the Lee Consultants Report”). For ease of reference, I will refer to the Building Appraisal Report and the Lee Consultants Report collectively as “the Consultants’ Reports”.
[5] On 8 February 2012, the Plaintiff through his solicitors issued a letter of demand to the First Defendant, claiming a sum of $111,330 as inter alia compensation for defective works done to the Property. On the same date, the Plaintiff’s solicitors wrote to the Professional Engineers Board (“PEB”), making a complaint against the First Defendant and Koh and requesting the PEB to investigate the matter and take necessary action against Koh. It appears that the Plaintiff also wrote to the Building and Construction Authority (“BCA”) on 20 February 2012 making a complaint against Koh.
[6] The dispute was resolved through mediation on 12 March 2012 and the Settlement Agreement was entered into between the Plaintiff and the Defendants. Pursuant to the Settlement Agreement, a professional engineer was to be appointed to set out the scope and specifications of works required to rectify the defects (“the Rectification Works”), prepare and call for a tender for the said works, and evaluate the tenders and award the contract. The scope and specifications of the Rectification Works were to be “based on” the Consultants’ Reports and were to be set out “on the basis of the most efficient manner to rectify the defects so as to ensure that the works comply with the required statutory regulations and are of a standard commensurate with the price paid by the [Plaintiff] for the original works”.
[7] Under the Settlement Agreement, the Defendants were to pay:
(a) the fees of the professional engineer;
(b) the costs of the Rectification Works;
(c) the costs of 2 “Somerset” service apartments of 3 bedrooms each (or equivalent) and the costs of storage of the Plaintiff’s chattels for the duration of the Rectification Works; and
(d) $20,000 to the Plaintiff as compensation for moving and costs.
As for the Plaintiff, he was to refrain from filing any complaints (presumably against Koh or the Defendants) with the PEB.
[9] Chan quoted a lump sum of $88,000 for his fees, which was to be paid progressively in instalments. Chan’s appointment on these terms was confirmed in a letter from the Plaintiff’s solicitors dated 19 March 2012. Subsequently there was some discussion between the parties regarding Chan’s fees, which the Defendants felt were too high. Around the end of March 2012, the Defendants’ solicitor at that time, Mr Low Chai Chong (“Low”), wrote to the Plaintiff’s solicitors stating that Chan’s quotation was far too high and seeking the Plaintiff’s consent for Koh to contact Chan to see if Chan could “give a discount” and also to clarify Chan’s scope of works. The Plaintiff had no objections.
[10] On 28 March 2012, Koh, together with Mr Freddie Chia (“Chia”), another partner in the First Defendant, met with Chan to discuss his fees (“the 28 March 2012 Meeting”). There is some disagreement as to what transpired at that meeting but what is not disputed is that after the meeting, Chan agreed to give Koh what was in effect a discount of $8,000 on his fees. The Defendants subsequently paid Chan $19,260, this sum being the first instalment of his fees, and Chan returned $8,000 in cash to the Defendants.
[11] Chan conducted site visits to the Property on 3 and 4 April 2012. He produced a set of tender documents for the proposed Rectification Works (“the Tender Document”), which he forwarded to the parties for their comments. A few amendments were made to the Tender Document pursuant to some comments from the Plaintiff, to which the Defendants did not object. On 10 May 2012, Chan sent out invitations to tender to various contractors. A site show-round of the Property (“the First Site Show-round”) was conducted by Chan on 17 May 2012. The first tender was opened on 31 May 2012 and four contractors submitted tenders based on the Tender Document as follows:
(a) Winning Flag Enterprise Pte Ltd (“Winning Flag”) at $188,800;
(b) Builders Alliance Pte Ltd (“Builders Alliance”) at $210,350;
(c) Effulgent Builder & Marketing Pte Ltd (“Effulgent”) at $542,318; and
(d) Crystallite Construction & Engineering Pte Ltd (“Crystallite”) at $623,500.
[12] Initially, Chan called for a tender interview with only the two higher bidders, Effulgent and Crystallite. However, after objections from the Defendants, all four tenderers were invited for a tender interview. Three were interviewed on 19 June 2012 whereas one (Builders Alliance) failed to turn up for the tender interview. The three tenderers were then asked to go for another site show-round on 21 June 2012 (“the Second Site Show-round”). Either during the tender interview or the Second Site Show-round, Chan handed a two-page questionnaire relating to certain items in the Tender Document (“the Tender Questionnaire”) to each contractor.
[13] The second tender was then opened on 26 June 2012. The revised bids were as follows:
(a) Winning Flag at $498,000;
(b) Effulgent at $542,318;
(c) Crystallite at $566,200.
[14] On 6 July 2012, Chan awarded the contract for the Rectification Works to Crystallite for $498,000. The Defendants were dissatisfied with Chan’s decision and did not make any further payment to the Plaintiff under the Settlement Agreement. After unsuccessful further mediation, the Plaintiff commenced the present suit on 16 August 2012. On the same date, the Plaintiff filed a complaint to the PEB against Koh by way of a statutory declaration. It is not in dispute that the Rectification Works have never started.
The pleadings
[15] The Plaintiff pleaded that he had suffered loss and damage as a result of the Defendants’ breach of the Settlement Agreement and thus claimed the following sums from the Defendants:
(a) $718,476.80, made up as follows:
(i) $74,900 being Chan’s outstanding fees (inclusive of goods and services tax (“GST”));
(ii) $532,860 being the costs of the Rectification Works (inclusive of GST);
(iii) $96,000 being the rental already incurred for two Sentosa Cove apartments for four months;
(iv) $14,716.80 being storage costs for four months;
(b) Rental of $24,000 per month (being the average rental for two “Somerset” service apartments) for four months being the duration of the Rectification Works to be carried out; and
(c) Storage costs of $3,679.20 per month from October 2012 until the completion of the Rectification Works.
[16] The Defendants denied that the Plaintiff was entitled to any payment and prayed for orders that Chan’s appointment as professional engineer under the Settlement Agreement and the award of the contract to Crystallite be set aside. The thrust of the Defendants’ argument on this point was that Chan was not independent and was controlled by or acting under the influence of the Plaintiff and/or his agents, and had also materially departed from his instructions in awarding the tender to Crystallite. The Defendants further prayed for a declaration that the Settlement Agreement had been repudiated or terminated, alleging that the Plaintiff had breached: (1) the fundamental term that he refrain from filing a complaint to the PEB; and (2) the implied term that he (and/or his agents) would not interfere with or exert any influence over the professional engineer in the course of his work.
[17] Alternatively, the Defendants’ case was that the Plaintiff (by himself and/or through his agents) had conspired with Chan to inter alia fix Chan’s fees at the unreasonable amount of $88,000, increase the scope and specifications of the Rectification Works beyond that prescribed in the Consultants’ Reports, and award the contract to a higher bidder instead of to Winning Flag following the first tender on 31 May 2012.
[19] The parties agreed to bifurcation of the counterclaim.
Issues
[20] Briefly, the issues to be determined in this case are as follows:
(a) Whether Chan’s appointment and the award to Crystallite should be set aside;
(b) Which party is in breach of the Settlement Agreement and what amount of damages is due to that party;
(c) Whether the Plaintiff and Chan had conspired to injure or cause loss to the Defendants; and
(d) Whether the Defendants are entitled to their respective counterclaims against the Plaintiff.
The witnesses
[21] It is useful at the outset to introduce the witnesses and set out a few observations on the reliability of their oral testimonies.
[22] There were five witnesses for the Plaintiff, comprising: (1) the Plaintiff; (2) the Plaintiff’s wife, Madam Kok Lai Mooi (“Madam Kok”); the Plaintiff’s two adult stepsons, (3) Dallan Cheah (“Dallan”) and (4) Dallon Cheah (“Dallon”); and (5) Chan. At all material times, Madam Kok, Dallan, and Dallon lived in the Property with the Plaintiff, although Dallan and Dallon frequently travelled overseas.
[23] The Plaintiff was generally unreliable as a witness and his testimony was not very useful. He frequently testified that he was ignorant of matters since he had left it to Madam Kok and his stepsons to deal with Koh and the A&A Works. Nevertheless, since the rest of the evidence was consistent with the Plaintiff’s testimony that he had little personal involvement in matters relating to the A&A Works or the Settlement Agreement, I found no need to draw any adverse inference (as submitted by the Defendants) against the Plaintiff as a witness.
[24] I found Madam Kok, Dallan, and Dallon to be generally forthright and credible witnesses. The testimonies of Madam Kok and Dallan were particularly relevant as they seemed to be the ones who were the most acquainted with Koh, Chan, and the works to be done on the Property. I noted however that Madam Kok occasionally had some difficulty recalling certain events that had taken place, for example in relation to what she had told or shown Chan during his site visits to the Property.
[25] As for Chan, while I did not doubt his general honesty as a witness, his testimony should be treated with circumspection since he appeared to be rather confused and forgetful at times. For example, Chan gave several different explanations of how he had arrived at his professional fees of $88,000 but also candidly admitted that his explanations were not consistent with his affidavit of evidence-in-chief (“AEIC”).
[26] There were six witnesses for the Defendants: (1) Koh; (2) Mr Abishek Murthy (“Murthy”), the Defendants’ expert witness; (3) Mr Wee Yong Ping (“Wee”), a project manager of Winning Flag; (4) Ms Sim Mui Ling (“Mui Ling”), a director of the Second Defendant; (5) Low, the Defendants’ former solicitor; and (6) Chia, a partner and director of the First Defendant.
[27] Koh was the key witness for the Defendants and was generally forthright in his testimony. For instance, Koh admitted that the Second Defendant was related to and managed by him. He also readily admitted that the A&A Works had been defective and not up to standard. However, certain parts of his testimony were of doubtful credibility, in particular his testimony relating to his suspicions about Chan’s partiality toward the Plaintiff at various junctures, which was not consistent with his surprisingly passive stance throughout the process.
[28] Murthy, the Defendants’ expert witness, was a professional engineer. He rendered an expert report on a number of matters relevant to the present dispute, including whether the quantification of the Rectification Works in the final tenders submitted by the tenderers took into account works which exceeded the scope of the rectification works covered by the Consultants’ Reports and/or reflected the most efficient manner of rectification.
Whether Chan’s appointment and the award to Crystallite should be set aside
[29] The first issue is whether Chan’s appointment under the Settlement Agreement and/or the award to Crystallite should be set aside.
[30] Parties rightly agreed that Chan’s appointment as the professional engineer under the Settlement Agreement was a form of expert determination. Expert determination as a mode of dispute resolution was explained by Chan Seng Onn J in The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385 (“Oriental Insurance”) at [25] as follows:
[31] In this case, it was clearly envisaged by the parties in the Settlement Agreement that a professional engineer would be appointed as an expert to determine the scope and specifications of the Rectification Works as well as award the tender for the Rectification Works. The question, however, is when one is entitled to set aside the appointment of the expert or a decision of the expert. It should be noted that the setting aside of an expert’s appointment is a distinct issue from the setting aside of the expert’s decision or determination.
Setting aside of Chan’s appointment as professional engineer
[32] The foundation of expert determination is the law of contract. The starting point for ascertaining the validity of an expert’s appointment is therefore the contract itself. In this case, the Settlement Agreement provided for the appointment of an expert as follows:
[33] What happened in this case was that since Mr Lee Hon Leong was not available to act, the Plaintiff and the Defendants nominated six professional engineers. Out of these six names, the mediator, Mr Chow Kok Fong (“the Mediator”), chose to appoint Chan.
[34] I do not see any reason for setting aside Chan’s appointment in this case. The Defendants did not contend that Chan’s appointment was not in accordance with the provisions of the Settlement Agreement. Nor did the Defendants contend that Chan was in a position of conflict of interest in that he had prior dealings with any interested party, as was the issue in HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v Toshin Development Singapore Pte Ltd [2012] 4 SLR 738 (“HSBC v Toshin”). Rather, the Defendants’ case was that Chan’s appointment should be set aside solely because he acted in a biased manner and chose to align his interests with those of the Plaintiff. To my mind, these concerns do not relate to the circumstances of Chan’s appointment. They are more relevant to the issue of whether Chan acted properly in making his determinations under the Settlement Agreement.
Setting aside of Chan’s award to Crystallite
[35] I then consider the question of whether the Defendants are entitled to an order that Chan’s award of the contract for the Rectification Works to Crystallite should be set aside on the grounds that: (1) Chan acted in bad faith or in a fraudulent or biased manner; or (2) Chan had materially departed from the scope of his instructions as set out in the Settlement Agreement.
[36] As a general rule, the only grounds for challenge of an expert’s determination are as follows:
(a) material departure from instructions;
(b) manifest error; or
(c) fraud, collusion, partiality and the like.
See Oriental Insurance ([30] supra) at [47].
[37] It can thus be seen that the grounds for challenge of an expert’s determination are narrow and the court will not interfere with the expert’s decision save in situations where intervention is necessary to uphold the parties’ contractual bargain. As stated by V K Rajah J (as he then was) in Evergreat Construction Co Pte Ltd v Presscrete Engineering Pte Ltd [2006] 1 SLR(R) 634 (“Evergreat”) at [34]:
Material departure from instructions
[38] I will start by considering the latter of the two bases relied upon by the Defendants to set aside Chan’s award of the contract to Crystallite. On what constitutes a material departure from instructions, the following passage by Dillon LJ in Jones v Sherwood Computer Services plc [1992] 1 WLR 277 at 287 (cited with approval in Oriental Insurance at [48] and Evergreat at [40]) bears repeating:
[39] The first step is thus to ask: what did the parties agree to remit to Chan under the Settlement Agreement? Clauses 6 to 10 of the Settlement Agreement set out the duties of the professional engineer (“PE”) as follows:
[40] The excerpt above shows that the parties agreed to remit three major decisions to Chan as the professional engineer under the Settlement Agreement:
(a) Determination of the scope and specifications of the Rectification Works. This was to be done based on the Consultants’ Reports and on the basis of the most efficient manner to rectify the defects so as to ensure that the works complied with the required statutory regulations and were of a standard commensurate with the price paid by the Plaintiff for the A&A Works.
(b) Calling for tenders for the Rectification Works from at least 3 contractors.
(c) Evaluation and award of the contract for the Rectification Works. This was to be done on the basis of the most reasonable quote received, considering all the circumstances and not just price alone.
[41] Chan was informed of his duties and the scope of his work through a letter from the Plaintiff’s solicitors dated 16 March 2012 which was copied to the Defendants’ solicitors. The scope of his work described in that letter was not the same as that stated in the Settlement Agreement. This, however, is immaterial because Chan confirmed that he was eventually furnished with a copy of the Settlement Agreement after the 28 March 2012 Meeting with between himself, Chia and Koh (see [10] supra) and before his site visits to the Property on 3 and 4 April 2012 and neither party contended that Chan was not bound to comply with the relevant provisions of the Settlement Agreement pertaining to his work.
[42] Having established the instructions that were given to Chan under the Settlement Agreement, the second step is to inquire into the nature of the mistake. If the mistake made constitutes a material departure from instructions, then the expert’s decision is not binding. As to the test of materiality, any departure from instructions must generally be regarded as material unless it can truly be characterised as trivial or de minimis in the sense of it being obvious that it could make no possible difference to either party; moreover, once a material departure from instructions is established, the court is not concerned with its effect on the result: Veba Oil Supply & Trading GmbH v Petrotrade Inc [2002] 1 All ER 703 at [26], cited with approval in Oriental Insurance at [57]. Put another way, a departure from instructions must be considered material unless the departure can be characterised as trivial or de minimis when analysed with respect to the instructions and that end result, even if shown not to be significantly different, must still be set aside as it is a nullity and not binding: Oriental Insurance at [84].
[43] A distinction should be drawn between mistakes made by the expert and a departure from instructions. In Nikko Hotels (UK) Ltd v MEPC plc [1991] 2 EGLR 103 (“Nikko Hotels”), Knox J expressed this distinction using the analogy of answering the right or wrong question (at 108):
[44] Nikko Hotels was applied shortly thereafter by Paul Baker QC in Pontsarn Investments Ltd v Kansallis-Osake-Pankki [1992] 1 EGLR 148, where he stated at 151:
Therefore, where the expert has not departed from his instructions and has asked the right questions, his decision cannot be challenged on the ground that he made a mistake, even if he subsequently admitted the mistake.
[45] I come now to the facts of the present case. The Defendants alleged that Chan materially departed from his instructions in the following ways:
(a) Chan did not base the scope and specifications of the Rectification Works solely on the Consultants’ Reports.
(b) Chan expanded the scope and specifications of the Rectification Works after the Tender Document was finalised.
(c) Chan did not ensure that the defects would be rectified according to the most efficient manner.
(d) Chan failed to ensure that the standard of the Rectification Works was commensurate with the price paid by the Plaintiff for the original A&A Works.
[46] The first point to consider is whether Chan was entitled to go beyond the scope of the Consultants’ Reports in preparing the scope and specifications of the Rectification Works. The Plaintiff’s position was that Chan was entitled to do so as clause 6 of the Settlement Agreement (see [39] supra) did not contain the terms “solely” or “only” and such terms should not be implied into the Settlement Agreement. The Defendants however contended that as a matter of contractual interpretation (as opposed to the implication of terms), the parties’ objective intention was that clause 6 of the Settlement Agreement should be read as including the terms “solely” or “only”.
[47] The Defendants’ main argument was that its interpretation of clause 6 of the Settlement Agreement was supported by the background facts leading up to the conclusion of the Settlement Agreement, namely that the Plaintiff’s claims at the mediation on 12 March 2012 were based solely on the findings in the Consultants’ Reports. The Defendants cited the following passage from Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 (“Zurich Insurance”) at [132]:
[48] The Plaintiff however pointed out that Zurich Insurance also cautioned that extrinsic evidence should only be employed to illuminate the contractual language and not as a pretext to contradict, vary, add to, or subtract from the terms of a written contract, the applicable test being whether the alternative interpretation falls within the scope of meaning that the contractual words could bear (see Zurich Insurance at [122]–[123], [132]). The Plaintiff thus submitted that to ask the court to read the words “only” or “solely” into clause 6 would be to effectively re-write the Settlement Agreement and it was impermissible to rely on extrinsic evidence for such purposes.
[49] The dispute here is primarily over the proper interpretation of the instructions given to the professional engineer in the Settlement Agreement. As such, there is a preliminary issue as to whether the court (instead of the expert) has jurisdiction to decide such questions of interpretation: see, eg, Norwich Union Life Assurance Society v P&O Property Holdings Ltd [1993] 1 EGLR 164; Mercury Communications Ltd v Director General of Telecommunications and another [1996] 1 WLR 48. While this issue was not raised by the parties, I consider this to be the applicable position in the present case in the absence of any indication that the parties intended to remit such questions to the professional engineer. In any case, the parties appeared to have proceeded on the basis that questions of interpretation should be decided by the court.
[50] In my judgment, Chan’s instructions under the Settlement Agreement did not restrict him to the scope of the Consultants’ Reports in preparing the scope and specifications of the Rectification Works. The plain language of the clause 6 of the Settlement Agreement merely provided that Chan was to “set out the scope and specifications of the rectification works based on” the Consultants’ Reports. Looking at the Settlement Agreement in its entirety, it appears that the parties intended to give the professional engineer a measure of discretion in preparing the scope of the Rectification Works. For example, as pointed out by the Plaintiff, clauses 7 and 8 of the Settlement Agreement provided that parties could review the scope and specifications prepared by the professional engineer and any disagreement would be referred back to the Mediator for a binding evaluation.
[51] In fairness to the Defendants, there is some merit in the point that the Settlement Agreement was concluded in the context of the Plaintiff’s letter of demand dated 8 February 2012 and the Plaintiff’s summary of claim provided for the purposes of the mediation on 12 March 2012, both of which were based solely on the findings in the Consultants’ Reports. While the Consultants’ Reports were obviously intended to be the main reference point for the professional engineer in determining the scope of the Rectification Works, I nevertheless find that clause 6 of the Settlement Agreement cannot be given the restrictive interpretation that was suggested by the Defendants, given the nature of the professional engineer’s role in the Settlement Agreement. Koh himself conceded in cross-examination that in certain circumstances, the professional engineer might be justified in going beyond what was specified in the Consultants’ Reports:
In a similar vein, Low, the Defendants’ former solicitor, stated his understanding of the professional engineer’s role under the Settlement Agreement as follows:
[52] Following from the discussion above, I am of the opinion that Chan did not materially depart from his instructions by including in the scope and specifications for the Rectification Works other works which were not stated in the Consultants’ Reports.
[53] Similarly, I am not satisfied that Chan materially departed from his instructions by expanding the scope and specifications of the Rectification Works after the Tender Document was finalised. The Defendants submitted that Chan did so through the issuance of the Tender Questionnaire to the tenderers and that this was impermissible under the Settlement Agreement which did not envisage changes being made to the scope and specifications of the Rectification Works once the Tender Document was finalised. The Plaintiff, on the other hand, submitted that the Tender Questionnaire was part of the tender exercise that Chan was engaged to conduct and was merely intended to clarify the scope of works covered by the tenderers. While it is true that the Settlement Agreement did not expressly allow for changes to be made to the Tender Document once it was finalised, it also gave the professional engineer a measure of discretion and autonomy in preparing the relevant documents and conducting the tender process. In this context it cannot be said that Chan, by issuing the Tender Questionnaire in the course of the tender process, had not done what he was appointed to do.
[54] As regards the Defendants’ last two points that Chan failed to ensure that the defects would be rectified according to the most efficient manner and that the standard of the Rectification Works was commensurate with the price paid by the Plaintiff for the original A&A Works, these arguments were essentially based on the expert opinion of Murthy, the Defendants’ expert witness, that Chan’s method of rectification and scope of works in the Tender Document was neither the most efficient nor of a standard commensurate with the price of the A&A Works. The Defendants were essentially saying that Chan had answered the right question in the wrong way and not that he had answered the wrong question. According to the authorities cited above, while this may constitute an error on the part of the expert, it does not constitute a departure from instructions.
[55] I should add that these conclusions do not, however, detract from the established principle that Chan, as a professional and as an expert, owes duties of reasonable skill and care to both parties and will be liable in damages should he be negligent in carrying out his duties: see Campbell v Edwards [1976] 1 WLR 403 (“Campbell v Edwards”) at 407. This is the safeguard which the law gives to parties when they appoint an expert: Holland House Property Investments Limited v Crabbe [2008] CSIH 40 at [6]. But this is a separate issue from that of setting aside his expert determination.
Fraud, collusion, and partiality
[56] I turn then to the other basis on which the Defendants challenged Chan’s award, namely that he acted in bad faith or in a fraudulent or biased manner. Many authorities have made general statements to the effect that an expert’s determination will not be binding in the event of fraud, collusion, partiality, and so on. A classic example is Lord Denning MR’s speech in Campbell v Edwards (see [55] supra) at 407: “If there were fraud or collusion, of course, it would be very different. Fraud or collusion unravels everything.” In Baber v Kenwood Manufacturing Co Ltd and Whinney Murray & Co [1978] 1 Lloyd’s Rep 175, Lawton J said at 181: “What is not acceptable is the risk of the expert being dishonest or corrupt.” These last two statements were reviewed in Evergreat, where Rajah J opined at [29] that: “In the absence of fraud or any corrupt colouring of the [expert’s] determination, there is neither liberty nor latitude to interfere with or rewrite the parties’ solemn and considered contractual bargain”. Perhaps the most comprehensive description of this category of vitiating factors was given in Oriental Insurance where Chan J referred at [47] to: “fraud, corruption, collusion, dishonesty, bad faith, bias or the like”.
[57] In this case, the parties were in agreement that Chan had the duty to act as an independent and impartial expert under the Settlement Agreement. The Defendants however submitted that the Plaintiff had influenced or interfered with Chan’s work under the Settlement Agreement and/or that Chan was biased and partial towards the Plaintiff throughout the tender process, such that Chan and the Plaintiff were colluding to obtain the best possible outcome for the Plaintiff to the Defendants’ detriment. The Defendants highlighted the following factors:
(a) Chan had inflated his fees;
(b) Chan considered the Plaintiff to be his client and saw himself as the Plaintiff’s professional engineer;
(c) Chan was of the opinion that the Rectification Works had to be carried out to the Plaintiff’s satisfaction;
(d) Chan had increased the scope of the Rectification Works on the instruction of the Plaintiff and/or his representatives;
(e) Chan advocated the Plaintiff’s interpretation of the Settlement Agreement although he had no part in drafting it;
(f) Chan chastised the Defendants for not voicing out their objections to the scope and specifications of the Tender Document;
(g) Chan unfairly disfavoured Winning Flag and Builders Alliance just because they were the tenderers nominated by the Defendants.
[58] Since one of the grounds of challenge raised by the Defendants is that of bias and partiality, I should say a few words about the applicable test for partiality in the context of an expert determination. In England, the test is one of actual bias and not apparent bias: see Macro and others v Thompson and others (No. 3) [1997] 2 BCLC 36 (“Macro v Thompson”) at 65; Bernhard Schulte GmbH & Co KG v Nile Holdings Ltd [2004] EWHC 977 (Comm) at [98]; John Kendall, Clive Freedman & James Farrell, Expert Determination (Sweet & Maxwell, 4th Ed, 2008) (“Expert Determination”) at para 14.11.4. The rationale for this rule was articulated by Robert Walker J in Macro v Thompson at 65 as follows:
[59] In Singapore, however, it appears that this point is not yet settled. In HSBC v Toshin (see [34] supra), which concerned allegations of bias against licensed valuers appointed pursuant to the lease agreement between the landlord appellant and the tenant respondent, the respondent argued before the Court of Appeal that at law, actual bias (and not apparent bias) was required to challenge an expert’s appointment (at [28]). The Court of Appeal did not express a final view on this question as it decided that the issue of bias (whether actual or apparent) did not even arise in that case (HSBC v Toshin at [58]). It is similarly not necessary for me to decide this question since the parties did not raise it and in any event, the Defendants seemed to have proceeded on the basis of actual bias rather than apparent bias. This issue therefore remains to be decided in a future case with the benefit of submissions from counsel.
[60] I now come to the Defendants’ allegations of bias and collusion against Chan. Dealing first with the alleged inflation of Chan’s fees, the Defendants’ position was essentially that Chan’s fees had been controlled by the Plaintiff. It was suggested that Chan seemed to have no idea as to how his fees were computed and that he had given a quote for his fees at $88,000 even before he had reviewed the Consultants’ Reports or inspected the Property. More significantly, the Defendants alleged that at the 28 March 2012 Meeting between Koh, Chia and Chan (see [10] supra), Chan had admitted or agreed that: (1) he did not quote a fee of $88,000; (2) he had no control over his fees; (3) his fees were usually only between $15,000 and $18,000; and (4) the Plaintiff was out to “destroy” Koh.
[61] Having considered the evidence before me, I was not persuaded that Chan’s fees had been controlled by the Plaintiff. The Defendant’s version of what transpired at the 28 March 2012 Meeting was supported by purely oral accounts from Koh and Chia which, on a closer examination, did not unequivocally point to the Plaintiff being in control of Chan’s fees. For instance, both Koh and Chia stated that Chan did not say who had control over his fees. Chia also clarified that Chan did not specifically say that the Plaintiff told Chan that he was out to destroy Koh. I have also taken into account the fact that Koh’s credibility as a witness was uneven (see [27] supra). As for Chia, his recollection of events has to be treated with some circumspection. He appeared to be unable to recall anything about the meeting other than the conversation he recounted in his affidavit (which would have taken only a few minutes) even though this meeting, according to him, lasted 45 minutes. Further, Koh and Chia’s accounts were disputed by Chan, who denied that he had told Koh and Chia that the figure of $88,000 was not his or that the Plaintiff was out to destroy Koh; Chan also said that there had been no mention during the meeting of his usual fees being between $15,000 and $18,000. As for the basis of Chan’s fees, Chan did admit that his fees of $88,000 were not based on the Consultants’ Reports since he had only received them after he first gave his quote to the Plaintiff’s solicitors. As highlighted by the Defendants, Chan also seemed unsure as to the breakdown of his fees. However, this is not sufficient to prove that the Plaintiff or his agents had manipulated Chan in the setting of his fees. The burden of proof that this had taken place lay with the Defendants and, in my judgment, they have not discharged it.
[62] The Defendants’ point that Chan considered the Plaintiff to be his client and saw himself as the Plaintiff’s professional engineer is not, in and of itself, sufficient proof of bias on his part. Chan’s role as the professional engineer under the Settlement Agreement is similar to that of a certifier under a construction contract whereby a contractor’s entitlement to be paid is predicated on the issuance of a certificate by the certifier. It is settled that the fact that a certifier under a construction contract is appointed by the employer is an unavoidable potential incidence of the contractual relationship and does not disqualify him from making a decision under the contract: Expert Determination at para 14.11.2.
[63] The case of Amec Civil Engineering Ltd v Secretary of State for Transport [2005] 1 WLR 2339 (“Amec”) provides a good illustration of this. Amec concerned a dispute resolution clause in a construction contract which provided that any dispute or difference was to be referred to and settled by the engineer whose decision was to be final and binding subject to arbitration proceedings being brought within a certain time. One of the issues before the court was whether the engineer’s decision under the contract was vitiated for procedural unfairness because a parallel claim was also being brought by the respondent against the engineer in respect of the subject matter of his decision. The majority of the Court of Appeal held that in the circumstances, the engineer had considered the matter properly and sufficiently; the fact that an equivalent claim was brought against the engineer did not disqualify the engineer from giving a valid decision under the dispute resolution clause since such a conflict of interest was an unavoidable potential incidence of the contractual relationship between the parties: Amec at [52].
[64] It has been observed that a certifier or professional consultant in a construction contract is often called upon to perform two different types of duties: (1) in issuing certificates which determine the contractor’s entitlement to be paid or deciding controversial matters such as valuation, he must act fairly and exercise his own judgment objectively; (2) in other matters, he is the agent of the owner and must look after the interests of the owner in the project: see Chow Kok Fong, Law and Practice of Construction Contracts Vol 1 (Sweet & Maxwell Asia, 4th Ed, 2012) at para 8.42; Hudson’s Building and Engineering Contracts (Nicholas Dennys QC et al eds) (Sweet & Maxwell, 12th Ed, 2010) at para 4–037.
[65] The dual function of an architect in a building contract was noted by Lord Reid in Sutcliffe v Thackrah [1974] AC 727 (“Sutcliffe”) at 737:
[66] In Hiap Hong & Co Pte Ltd v Hong Huat Development Co (Pte) Ltd [2001] 1 SLR(R) 458, the Court of Appeal cited Sutcliffe with approval, making the following observations (at [15]–[16]):
[67] I regard the above authorities to be applicable to the present case. Chan cannot be regarded as independent because he is employed by the Plaintiff. Chan’s general function was to act on behalf of the Plaintiff, for example in supervising the Rectification Works and liaising with the relevant authorities to regularise all drawings, submissions and construction works on site. (While these functions were set out in the letter from the Plaintiff’s solicitors dated 16 March 2012 and not the Settlement Agreement itself, I note that the Settlement Agreement did not prohibit Chan from undertaking such responsibilities and in any event, the letter from the Plaintiff’s solicitors dated 16 March 2012 was copied to the Defendants’ solicitors at that time and no objections to it were ever raised by the Defendants.) However, in those parts of Chan’s duties which allocated decision-making functions to him, he was required to act professionally, honestly and impartially in discharging those functions as opposed to favouring the interests of the Plaintiff: see Scheldebouw BV v St. James Homes (Grosvenor Dock) Ltd [2006] EWHC 89 (TCC) at [34]–[35].
[68] Chan’s decision-making functions under the Settlement Agreement included setting out the scope and specifications of the Rectification Works, conducting a tender for the Rectification Works and evaluating and awarding the tender. The parties must have intended that Chan was to discharge these functions in a fair and unbiased manner, without preferring the interests of either the Plaintiff or the Defendants. Indeed, the entire purpose of Chan’s appointment under the Settlement Agreement was to provide a fair and neutral way of rectifying the defective A&A Works.
[69] The real question is therefore whether Chan acted impartially in drawing up the scope and specifications of the Rectification Works and in his conduct of the tender process, or whether he favoured the interest of the Plaintiff in doing so.
[70] On the evidence before me, I consider that Chan did favour the interest of the Plaintiff in carrying out his duties under the Settlement Agreement and accordingly failed to act impartially in that regard. I agree with the Defendants that this was evident from the fact that: (1) Chan was of the mentality that the Rectification Works had to be carried out to the Plaintiff’s satisfaction; and (2) Chan had increased the scope of the Rectification Works on the request of the Plaintiff and/or his representatives.
[71] In my judgment, Chan acted in the way he did due to the mistaken view that he was to act as the Plaintiff’s agent in setting out the scope and specifications of the Rectification Works and in conducting the tender for the Rectification Works.
[74] The last point of note relates to the Defendants’ submissions that Chan unfairly disfavoured Winning Flag and Builders Alliance simply because they were the tenderers nominated by the Defendants. It was not disputed that Winning Flag and Builders Alliance were the Defendants’ nominated contractors. Chan’s evidence was that he had found their quotations too low to carry out the job properly and that, after a telephone conversation with Koh, he had realised that Koh was behind their tenders since he had recommended them as contractors. Chan took this as a factor against their bids for the following reason:
[75] In my judgment, if Chan’s testimony is correct, he cannot be faulted for taking into account the fact that Winning Flag and Builders Alliance were contractors nominated by Koh as a factor against them, especially since Koh was clearly an interested party insofar as he was the one responsible for paying for the Rectification Works. Nevertheless, while Chan may be have been rightly suspicious of the competence and reliability of Winning Flag and Builders Alliance, his evaluation of the tenderers did not seem to have taken into account the interests of the Defendants at all but were based on the Plaintiff’s interests as the building owner. In fact, under cross-examination, Chan admitted that his first evaluation report dated 8 June 2012 which evaluated the tenders received from the first tender exercise was not objective and contained criticisms of Winning Flag and Builders Alliance that were not fair.
[76] In re-examination, Chan attempted to explain that he had not in fact understood the meaning of “not objective” and that he had only agreed with counsel for the Defendants, Mr Derek Kang (“Mr Kang”), that he was not objective because “I’m a bit confused”. However, I found his claim of ignorance incredible. First, from what I observed to be his command of the English language in the witness box, it was highly unlikely that he did not understand the meaning of “not objective”. Second, he had in fact answered other questions in the course of his oral testimony confirming his duty to be “objective” in preparing the Tender Document and in assessing the tenders. Third, at yet another point in his testimony, he had contrasted the objectivity with which he evaluated the second round of tenders with the lack of thereof in the first round:
[77] I was also not convinced by the somewhat strained distinction sought to be made by counsel for the Plaintiff, Mr Eric Chew (“Mr Chew”), in re-examination (which Chan agreed with) that Chan had merely been “agreeing with Mr Kang’s feeling that it’s not fair” and was “not saying that [Chan] had not been fair”.
[78] Therefore, having concluded that Chan failed to act impartially and fairly as between the parties due to his own mistaken notion of his functions under the Settlement Agreement, his award of the contract to Crystallite must be set aside.
Breach of the Settlement Agreement
[79] The question then is what effect the setting aside of Chan’s award to Crystallite has on the Settlement Agreement.
[80] The usual consequence of a successful challenge to an expert’s determination is that it is a nullity and does not bind any of the parties: Oriental Insurance at [84]. Usually, the court will direct that the expert come to a new decision in accordance with the instructions as clarified by the court: Expert Determination at para 14.18.3. For example, in Oriental Insurance, the expert was found to have materially departed from his instructions such that it amounted to a manifest error. Chan J thus remitted the determination to the expert for his re-consideration and provided the expert with a detailed computation guide (Oriental Insurance at [223]–[225]). However, the courts have also substituted alternative machinery for the contractual machinery in appropriate cases. For example, in Macro v Thompson (see [58] supra) the court considered that a revaluation by the expert auditor would be inappropriate given his lack of expertise in the relevant area and directed that new valuations be conducted.
Implied term not to interfere with the expert’s independence
[82] It was not in dispute that there was an implied term in the Settlement Agreement that the parties would not seek to interfere with the professional engineer’s independence or influence the professional engineer in his course of work. The dispute is over whether the Defendants have adduced sufficient evidence of unlawful influence or interference by the Plaintiff in Chan’s work.
[83] In my judgment, there is insufficient evidence of such unlawful influence or interference in this case. I have already found that there is no evidence that the Plaintiff and/or his agents had controlled Chan’s professional fees (see [61] supra). I have also found at [71] above that any bias or partiality towards the Plaintiff on the part of Chan was because he had misconstrued his role under the Settlement Agreement and not because the Plaintiff had acted improperly.
[84] The only evidence of any “interference” with Chan’s work was that Madam Kok had brought Chan around the Property during his site visits on 3 and 4 April 2012 to point out some defects which were not contained in the Consultants’ Reports, and that she had made some requests for additional rectification works to Chan and/or the potential contractors during the First and Second Site Show-rounds. However, I do not regard the Settlement Agreement as prohibiting any communication between the Plaintiff and his family members and the professional engineer or would-be contractors who came to inspect the Property which they were unfamiliar with and which the Plaintiff and his family were living in. It would have been reasonable to expect some communication to take place on those occasions and if the parties intended to prohibit this, the Settlement Agreement would have stated it explicitly. In this regard, I note that Koh, on behalf of the Defendants, had himself made a telephone call to Chan on either 6 or 7 June 2012 regarding Chan’s evaluation of the tenders received from the first tender exercise. While the contents of the telephone conversation were disputed, what was not in dispute was the fact that there were communications between Koh and Chan which were initiated by Koh and which did not involve the Plaintiff.
[85] The issue is therefore whether Madam Kok’s conduct in communicating with Chan and/or the potential contractors went beyond what was acceptable and amounted to an improper attempt to influence Chan or interfere with his independence.
[86] There is nothing to suggest that Madam Kok knew that she was pointing out defects to Chan which were not in the Consultants’ Reports or that she was trying to get Chan to include in the Rectification Works additional works that should not have been the Defendants’ responsibility. As I have stated above at [24], Madam Kok was an honest and candid witness. At that time, she was living in a house that had numerous defects as a result of the Defendants’ failure to carry out the A&A Works properly. In those circumstances, it is understandable that she would have been eager to point out all the defects to Chan during his visits to the Property. Her primary goal was to get her house fixed and knowing that Chan was supposed to be the professional, she would not have been particular about whether or not a specific defect was within the scope of the original A&A Works and Consultants’ Reports. There is no evidence of any impropriety on her part or that her actions, from an objective point of view, were the type of actions which would have impaired Chan’s ability to independently determine the issue in exercise of his professional judgment.
[87] As for the communications made by Madam Kok during the First and Second Site Show-rounds relating to certain things to be done on the Property, Chan characterised these as “requests” and there is no evidence that any of these “requests” were made in a manner which would have impaired Chan’s professional judgment in assessing whether they should be properly acceded to. More detailed testimony of these “requests” was given by Wee, a project manager of Winning Flag and a witness for the Defendants, but the reliability of his testimony is doubtful. First, in Wee’s AEIC, it was unclear whether the requests came from Dallan, Dallon, Madam Kok or Chan. Second, in Wee’s oral testimony, he did not appear entirely sure about the attribution of instructions to Madam Kok. Third, his recollection of almost everything which he said he was told to do during either the First or Second Site Show-rounds or the Tender Interview was, according to him, based upon “impressions” he had which were unconfirmed. Moreover, in the one instance where he did go into some detail explaining the basis of his “impression”, which was in relation to an alleged instruction by either Dallan or Dallon to replace the glass panels in the lift instead of re-using them, his explanation was quite unconvincing:
[88] Similarly, there was no or (for the reasons set out above) insufficient evidence that the Plaintiff, Dallan or Dallon had made improper attempts to influence Chan or interfere with his independence. Chan may have expanded the scope and specifications of the Rectification Works beyond the Consultants’ Reports or even after the Tender Document was finalised but this in itself is not proof that the Plaintiff and/or his agents acted in breach of the obligation under the Settlement Agreement not to interfere with Chan’s independence. I should also reiterate that my finding is not that Chan acted fraudulently or in collusion with the Plaintiff and/or his agents, but that he acted on a mistaken view as to his proper function under the Settlement Agreement.
Defendants’ failure to pay and Plaintiff’s complaint to the PEB
[89] A brief chronology of events is useful here. Chan awarded the contract for the Rectification Works to Crystallite on 6 July 2012 and the letter of award was copied to inter alia Low, who was the Defendants’ solicitor at that time. In an e-mail dated 6 July 2012, Low wrote to Chan to inform him that the Defendants had “serious reservations on the award of this contract, and the events leading to the award” and to reserve the Defendants’ rights pending fuller instructions. The Plaintiff’s solicitor, Mr Chew, replied via an e-mail dated 12 July 2012, asking for further details of the Defendants’ “reservations” and informing Low that the Plaintiff would not hesitate to commence legal action if the Property was not rectified speedily. On the same date, Mr Chew sent a letter on behalf of the Plaintiff to the Defendants demanding payment of the contract sum for the Rectification Works, the balance of Chan’s fees, as well as rental and storage expenses which the Plaintiff had proceeded to incur (having informed the Defendants of these expenses via an earlier letter but apparently receiving no response from the Defendants). On 20 July 2012, Low wrote to Mr Chew, setting out certain areas of concern and requesting mediation pursuant to clause 14 of the Settlement Agreement, which stipulated that any disputes arising from the agreement had to be referred first to the Mediator for further mediation before any legal action was commenced. There was then some further discussion between the parties regarding the further mediation, which eventually took place before the Mediator on 6 August 2012. The further mediation session was unsuccessful. On 16 August 2012, the Plaintiff commenced the present suit and also filed a complaint to the PEB.
[91] I then turn to consider the Defendants’ argument that the Plaintiff breached a fundamental term of the Settlement Agreement by filing a complaint to the PEB, contrary to his obligations under clause 12 of the Settlement Agreement which provided as follows:
[92] Much was made by the Defendants of the importance to them of the Plaintiff refraining from making such a complaint and the fact that all the parties were aware of this before and during the negotiations leading to the Settlement Agreement. The Defendants alleged that the Plaintiff had, in fact, used the threat of a complaint to drive a hard bargain during the negotiations. However, I do not need to make a determination on whether the obligation not to complain to the PEB was a fundamental term of the contract. This is because, in my judgment, clause 12 of the Settlement Agreement, insofar as it seeks to prohibit the Plaintiff from making a complaint to the PEB, is illegal and unenforceable because it allows a professional engineer to effectively contract out of regulatory oversight of his professional conduct by the PEB under the Professional Engineers Act (Cap 253, 1992 Rev Ed) (“the Professional Engineers Act”).
[93] The Defendants’ arguments on this point were fivefold. First, they submitted that the Plaintiff had not pleaded that clause 12 of the Settlement Agreement was contrary to public policy. I am not persuaded by this argument. The unenforceability of a particular contractual term on public policy grounds cannot be dependent on the pleadings of the parties. Public policy considerations are, by their very nature, overriding factors which the court has to take into account regardless of the positions which the parties may take. As Lindley LJ stated in Scott v Brown, Doering, McNab & Co [1892] 2 QB 724 at 728: “It matters not whether the defendant has pleaded the illegality or whether he has not. If the evidence adduced by the plaintiff proves the illegality the Court ought not to assist him.”
[94] The second contention of the Defendants was that there was nothing in the Professional Engineers Act or the relevant subsidiary legislation that compelled any person to file a complaint to the PEB under any circumstances, unlike in s 424 of the Criminal Procedure Code (Cap 68, 2012 Rev Ed) (“CPC”) which imposed a duty to give information of certain offences. An agreement not to make a report in relation to an offence set out in s 424 of the CPC would thus be unenforceable because it would be an agreement to resile from a legal duty or obligation. The Defendants thus submitted that in the absence of any legal duty or obligation to report any act or offence to the authorities, an agreement not to report such an act or offence was enforceable. Third, the Defendants argued that clause 12 of the Settlement Agreement was akin to a compromise by a party not to commence legal proceedings against another party in exchange for adequate compensation, which was valid and enforceable. Fourth, the Defendants also likened the obligation in clause 12 to an agreement not to volunteer to give evidence, which was upheld in the English case of Barrett v Universal-Island Records Ltd & Ors [2006] EWHC 1009 (Ch) (“Barrett”). Finally, the Defendants highlighted that public policy also required that contracts freely entered into be upheld.
[95] I address the second and last points raised by the Defendants first. As I understand it, the Defendants’ argument on the second point was essentially that because the Professional Engineers Act allows for complaints to be made to the PEB but does not compel complaints to be made, it would not be contrary to the said Act for parties to contract out of their rights to complain against a professional engineer to the PEB. The fallacy of this argument is clearly demonstrated by the well-known case of Johnson v Moreton [1980] AC 37 (“Johnson v Moreton”) where the House of Lords held that a particular statutory provision in relation to agricultural holdings gave a tenant an option to serve a counter-notice in response to a notice to quit served on him by his landlord and that the words and policy of that statute made it clear that the tenant could not by agreement exclude his right to serve a counter-notice under that statutory provision. Simply because the Professional Engineers Act does not impose a duty on persons to make complaints but allows for complaints to be made is thus not conclusive; the essential inquiry is parliamentary intention and the purpose of the statute. As for the Defendants’ last point on freedom of contract, while this general principle cannot be denied, this is not the end of the inquiry. Indeed, in Johnson v Moreton, Lord Hailsham of St Marylebone noted the maxim that a person may renounce a right which exists solely for his own use or benefit but that the key to the interpretation of this maxim was in determining “whether the particular liberty or right conferred by the statute or rule of law is entirely for the benefit of the person purporting to renounce it. If there is a public as well as a private interest a contrary Latin maxim applies” (at 58).
[96] As regards the remaining submissions of the Defendants, these submissions overlook the fact that the legislative intent of the Professional Engineers Act is to make an engineer accountable for his professional conduct not only to his client but also to a statutory body whose functions include the maintenance of standards of professional conduct and ethics of the engineering profession (see s 6(d)). This reflects the wider public interest which is to prevent misconduct on the part of those who hold themselves out to the public at large as professional engineers.
[97] I note that the Defendants have attempted to draw an analogy between clause 12 of the Settlement Agreement and contracts not to commence legal proceedings or not to give evidence which have been held to be valid. The examples raised by the Defendants are instances of contracts to stifle a prosecution or contracts that tend to oust the jurisdiction of the courts, and the Defendants are right to point out that the prohibition only applies to contracts which adversely affect the public interest; it does not affect a contract in which the relevant offence or wrong is essentially a matter of private interest. Hence the distinction drawn between contracts stifling the prosecution of compoundable offences (which are not opposed to public policy) and contracts which pertain to non-compoundable offences (which are illegal and against public policy): see AJT v AJU [2011] 4 SLR 739 at [20]. The rationale for this is that conduct which tends to undermine the wider public interest should be left to the administration of the law and not to private individuals. As Cotton LJ observed in the English Court of Appeal decision of Windhill Local Board of Health v Vint (1890) 45 Ch D 351 at 363:
[98] I do not however think that the examples raised by the Defendants assist them in the present case. Unlike the CPC which classifies certain offences as compoundable, there is no provision in the Professional Engineers Act which allows professional engineers to release or exempt themselves from disciplinary proceedings by paying compensation. In any case, clause 12 of the Settlement Agreement seeks to prohibit all complaints to the PEB without drawing any distinction between minor and serious forms of misconduct. I note moreover that the complaint which the Plaintiff lodged to the PEB alleged inter alia that Koh “[w]as both the qualified person supervising the additions and alterations … and the builder of the said works” and that he had “[d]emolished part of the pile cap without confirming the structural integrity of the same”. These are serious allegations as they pertain to a conflict of interest on the part of Koh in the discharge of his duties as a professional engineer as well as the safety of certain works undertaken by him. Misconduct of this character can hardly be regarded as a matter which can be excluded from oversight by the PEB by an agreement between private parties.
[99] It should be noted that there is a difference between the situation where a contracting party undertakes not to file a complaint in future and a complainant undertaking to write to a disciplinary body already seised of jurisdiction informing that body that he is desirous of withdrawing his complaint or that the parties have amicably settled the matter. The difference lies in the effect of the contractual undertaking on the statutory regime governing the professional’s conduct. In the latter situation, unless the relevant legislation provides otherwise, the disciplinary proceedings already commenced are not affected by the subsequent withdrawal of the initial complaint: see Manjit Singh s/o Kirpal Singh and another v Attorney-General [2013] 4 SLR 483 at [5] on similar disciplinary proceedings against solicitors under the Legal Profession Act (Cap 161, 2009 Rev Ed). It will then be up to the disciplinary body to determine how it will dispose of the matter, taking into consideration the information it has received from the complainant. Accordingly, I would have had no difficulty upholding that portion of clause 12 which required the Plaintiff to “forthwith inform the Building and Construction Authority that the matter has been resolved and another Professional Engineer will be taking over the conduct of the matter”. By contrast, the offending portion of clause 12 of the Settlement Agreement imposes an unqualified prohibition on making complaints to the PEB. While a complaint to the PEB under the Professional Engineers Act can be made by persons other than the client of the professional engineer, it has to be borne in mind that a large proportion of instances of misconduct by professional engineers will only be brought to the attention of the PEB through complaints from their clients. To allow a professional engineer to enter into a contract with his client to prohibit the client from lodging any complaint to the PEB would significantly curtail the extent to which the professional accountability envisaged by the Act can be achieved. Even if there was a countervailing public policy consideration in allowing business to be transacted freely and in upholding commercial bargains (as was alluded to in Barrett), this would be outweighed by the need to uphold professional accountability in the present situation.

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Poh Cheng Chew v K P Koh & Partners Pte Ltd and another

Laws this judgment relies on

Grounds of decision

Background facts

The pleadings

Issues

The witnesses

Whether Chan’s appointment and the award to Crystallite should be set aside

Setting aside of Chan’s appointment as professional engineer

Setting aside of Chan’s award to Crystallite

Material departure from instructions

Fraud, collusion, and partiality

Breach of the Settlement Agreement

Implied term not to interfere with the expert’s independence

Defendants’ failure to pay and Plaintiff’s complaint to the PEB