A party's contractual discretion to value completed work must be used in good faith

1. Introduction

2. [1]

   [1] AD/CA 36/2025 (“AD 36”) and AD/CA 42/2025 (“AD 42”) (collectively, “appeals”) are cross-appeals from the decision of a Judge of the High Court (“Judge”) below in HC/S 1040/2020 consolidated with HC/S 1042/2020, HC/S 1051/2020 and HC/S 1052/2020 (collectively, “Suit 1040”). Suit 1040 was commenced by Shipworks Engineering Pte Ltd (“Shipworks”) and Lanka Marine Pte Ltd (“Lanka”) (collectively, the “plaintiffs”), against Sembcorp Marine Integrated Yard Pte Ltd (“SMIY”) and Jurong Shipyard Pte Ltd (“Jurong”) (collectively, the “defendants”). AD 36 is the plaintiffs’ appeal and AD 42 is the defendants’ cross-appeal.

3. [2]

   [2] The plaintiffs claimed at trial $26,589,879.95 for three different categories of work they had carried out for the defendants: “Manpower Jobs”, “Sub-Task Jobs” and “Miscellaneous Jobs” (see below at [5]). The sum claimed comprised $26,048,727.76 for 203 unpaid invoices for works and services across the three categories of work explained below (at [5]), and $541,152.19 on quantum meruit for 12 completed Sub-Task Jobs for which invoices had not been issued.

4. [3]

   [3] The defendants disputed the claim and counterclaimed for $20,822,519.59, comprising $20,384,284.41 for moneys they allegedly overpaid to the plaintiffs on irregular invoices, and $438,235.18 for administrative charges they were entitled to whenever they made partial payments to the plaintiffs, pursuant to agreements between the parties (see below at [15]).

5. [4]

   [4] The Judge partially allowed both the claim and the counterclaim. The Judge’s decision is recorded in Shipworks Engineering Pte Ltd v Sembcorp Marine Integrated Yard Pte Ltd [2024] SGHC 325 (“Liability Judgment”) and Shipworks Engineering Pte Ltd v Sembcorp Marine Integrated Yard Pte Ltd [2025] SGHC 40 (“Quantum Judgment”).

6. Background to the dispute

7. [5]

   [5] As mentioned (at [2]) above, the defendants engaged the plaintiffs for three categories of work:

8. [6]

   [6] The parties’ relationships were mainly governed by the following agreements:

9. [7]

   [7] When Suit 1040 was first commenced, the plaintiffs’ claim was based on 317 unpaid invoices for the three types of work and the quantum meruit claim for the 12 completed STJs for which invoices had not been issued (“Non-Invoiced Work” or “Non-Invoiced STJs”). The plaintiffs obtained summary judgment for 114 of the 317 invoices. Thus, as noted above (at [2]), the unresolved portion of the plaintiffs’ claim that proceeded to trial and which is the subject of these appeals only concerned the 203 unpaid invoices and the Non-Invoiced Work.

10. [8]

    [8] To establish their respective claims and resist the claims they faced, the parties adduced documents which were placed in their respective bundles of documents. Much of the contention of the parties centred on the authenticity and reliability, and the relevance of certain categories, of documents in the respective bundles for the claim and counterclaim. Allegations that the signatures of the defendants’ representatives in some of these documents were forged or fabricated were made by the defendants in an effort to challenge the authenticity and reliability of some documents. As we will explain, the Plaintiffs’ Set of Documents (“PSD”) comprised only copies of the relevant documents while the Defendants’ Set of Documents (“DSD”) comprised a mix of originals and copies.

11. The Plaintiffs’ Set of Documents

12. [9]

    [9] The PSD comprised copies of the following documents:

13. (a) final invoices for the various works, with progress payments accounted for where applicable;

14. (b) the work orders issued by the defendants (“WO”s); and

15. (c) the following supporting documents:

16. (i) where manpower was supplied (ie, for all Manpower Jobs and some Sub-Task Jobs where additional manpower was required):

17. (A) timesheets in the plaintiffs’ format which recorded the names of the workers and the hours clocked for a given day (“Plaintiffs’ Timesheet”s or “PT”s);

18. (B) timesheets in the defendants’ format which recorded the number of workers and the hours clocked by those workers for a given day (“Daily Timesheet”s or “DT”s); or

19. (C) timesheets in the defendants’ format which recorded the names of workers and the hours clocked by those workers per day for that week (“Weekly Timesheet”s or “WT”s);

20. (ii) for the Sub-Task Jobs:

21. (A) Job Completion Reports (“JCR”s);

22. (B) Sub-Task Work Lists (“STWL”s); and/or

23. (C) Payment Summaries;

24. (iii) for the Miscellaneous Jobs:

25. (A) where the work was cleaning of toilets, Work Completion Reports (“WCR”s); and

26. (B) where the work was the supply of lorry cranes, Transport Supply Timesheets (“TST”s).

27. [10]

    [10] A key feature of the plaintiffs’ case was that any one of these documents, eg, a PT, DT or WT, was on its own sufficient to establish their claim for the manpower supplied. This perhaps explains why the PSD was not consistent in terms of the type of supporting document that was required to establish the claim for the supply of manpower. We will return to this point when we address the work that was carried out and the payment processes that were used by the defendants to evaluate payment claims.

28. The Defendants’ Set of Documents

29. [11]

    [11] The DSD comprised:

30. (a) original final invoices;

31. (b) original WOs; and

32. (c) a mix of originals and copies of supporting documents in the following forms.

33. (i) where manpower was supplied, either PTs only, or DTs and/or WTs.

34. (ii) for the Sub-Task Jobs, JCRs, STWLs and/or Payment Summaries.

35. (iii) for the Miscellaneous Jobs:

36. (A) where the work was the cleaning of toilets, WCRs; and

37. (B) where the work was the supply of lorry cranes, TSTs.

38. [12]

    [12] We make some preliminary observations. First, the defendants’ case is not that all the documents in the DSD were received by the defendants from the plaintiffs prior to these proceedings. Some of the documents in the DSD were copies of documents the defendants obtained pursuant to a Notice to Produce issued by the defendants to the plaintiffs on 18 January 2021. Others were allegedly received by the defendants from the plaintiffs pursuant to the process for making payment claims. As we pointed out to counsel for the defendants Ms Koh Swee Yen SC (“Ms Koh”) at the hearing of the appeals, this unnecessarily complicated matters. This was because there was no easy way to tell which documents in the DSD the defendants assert they received pursuant to the Notice to Produce, and which they say they did not. Where necessary, we will distinguish the documents in the DSD in the following manner: (a) the documents that were disclosed in the proceedings below pursuant to the Notice to Produce, and (b) the documents the defendants say they in fact received from the plaintiffs pursuant to the payment processes (“Received Documents”)

39. [13]

    [13] Second, even the Received Documents were a mix of originals and copies. Ms Koh explained that some of the Received Documents were copies because that was what the plaintiffs had submitted to the defendants. For reasons that will become apparent later when we discuss the payment processes, it was unclear why that would be the case. This was never satisfactorily explained by the defendants.

40. [14]

    [14] Third, while the Received Documents were (according to the defendants) actually received from the plaintiffs, the defendants did not accept that they were relevant for making a payment claim. There was significant disagreement before the Judge and on appeal as to which documents were relevant for making payment claims for the supply of manpower, with the plaintiffs and the defendants each advancing their own version of the payment process and the documents relevant to the payment claims. We consider this below at [96]–[108].

41. Decision below – Liability Judgment

42. [15]

    [15] On 20 December 2024, the Judge partially allowed the claim and counterclaim (Liability Judgment at [82]). At this juncture, it suffices for us to note that the counterclaim was broadly segregated into three parts: (a) moneys overpaid on allegedly irregular invoices and supporting documents; (b) administrative charges pursuant to the Administrative Charges Agreements; and (c) payments made on irregular invoices and supporting documents that were allegedly submitted by the plaintiffs in relation to 19 WOs on which the plaintiffs brought no claims (this counterclaim was made in HC/S 1042/2020 (“Suit 1042”)). The overpayment component in (a) was addressed in the Liability Judgment on the basis of the Judge’s findings on ten types of irregularities (Types A to J) which the defendants pleaded in relation to the alleged irregular invoices. In this regard, the Judge preferred the PSD’s PTs where they were authenticated and rejected the defendants’ allegation of irregularity in respect of the corresponding WOs. In contrast, the Suit 1042 counterclaim in (c) was dealt with separately in the Quantum Judgment (see below at [78]).

43. [16]

    [16] For ease of reference, we summarise the Liability Judgment in a similar sequence as the Judge’s analysis set out below, addressing the relevant context as each issue arises:

44. (a) First, the billing and payment processes that were common to all three categories of work;

45. (b) Second, the extent of the defendants’ contractual discretion to determine the value of the work performed by the plaintiffs, under cll 9(a) and 17 of the CRA and SRA;

46. (c) Third, the work process for the Manpower Jobs, as well as the “Types A to E” irregularities relating principally to the Manpower Jobs. For context, the defendants pleaded a total of ten types of irregularities (Types A to J) against the documents in the DSD. Depending on the evidence relating to a particular WO, an irregularity might defeat or reduce an unpaid claim, support the defendants’ counterclaim for repayment, or have no consequence because the same work was proved by other reliable evidence. The Judge’s task was therefore ultimately to determine, WO by WO, whether the work and amount claimed were proved, what evidential weight should be given to the relevant supporting documents, and what sum, if any, remained payable after accounting for earlier payments. In essence, the ten types of irregularities were:

47. Type A: Absence of the WTs;

48. Type B: Fabricated DTs or forged signatures on the DTs;

49. Type C: Forged or fabricated signatures on the PTs;

50. Type D: Discrepancy between the records kept by the defendants and timesheets submitted by the plaintiffs;

51. Type E: The DTs submitted under the wrong WO;

52. Type F: Duplicate claims for the same work;

53. Type G: Inflated claims for manpower (in relation to STWLs);

54. Type H: The STJ WCRs bore inflated claims;

55. Type I: Overcharging for work; and

56. Type J: Unverified supporting documents for the Miscellaneous Jobs.

57. (d) Fourth, the work process for the STJs and the corresponding Type F to Type I irregularities.

58. (e) Fifth, the work process for the Miscellaneous Jobs and the Type J irregularity.

59. (f) Sixth, the claim for the Non-Invoiced STJs.

60. (g) Seventh, the defendants’ argument that the plaintiffs’ entire claim should be struck out for forgery.

61. (h) Finally, the defendants’ counterclaim for administrative charges pursuant to the Administrative Charges Agreements.

62. Billing and partial payment process

63. [17]

    [17] First, the parties agreed on the billing process for all three categories of work. For a full payment claim, the plaintiffs submitted the original invoice, WO and supporting documents to the defendants’ finance department (“Finance Department”). Those documents were then circulated through several levels of review, including the Blasting and Painting (“BP”) section, the Head of Department (“HOD”) of the BP section (“BP Section”), the defendants’ project manager (“Project Manager”) and the defendants’ Production Control and Production Department (“PCPD”). A broadly similar process applied to a request for partial payment, except that the PCPD could revise – usually by reducing – the sum requested before approving payment (Liability Judgment at [12]–[13]).

64. [18]

    [18] The parties, however, disagreed over the nature of the partial payments. The plaintiffs said that these were progress payments for work already performed while the defendants insisted that they were advances or loans intended to provide the plaintiffs with liquidity while work remained ongoing. This disagreement was significant because, on the plaintiffs’ case, the defendants paid attention to the supporting documents when approving these partial payments, which were paid without any issue, and which the defendants now sought to claw back. However, on the defendants’ case, since these partial payments were loans, the defendants had not assessed or ascertained the value of the works performed as indicated in the supporting documents before making the payments. The defendants should therefore be permitted to claw back these payments as they were made mistakenly.

65. [19]

    [19] The Judge accepted that these partial payments were progress payments because he found that the defendants examined the supporting documents and revised the sum to be paid with reference to the amount of work performed (Liability Judgment at [14]). This finding is significant in so far as a partial payment indicated that the claim and supporting documents had passed through the defendants’ internal review process and that the defendants had assessed and approved payment for work that had already been performed. However, that did not, without more, make the payment immune from challenge; the defendants could still allege that a particular payment was unsupported or exceeded the amount properly payable.

66. The defendants’ contractual discretion

67. [20]

    [20] Second, in relation to the defendants’ right to assess the works done by the plaintiffs, cl 9(a) of the CRA and SRA provided that Jurong reserved “the absolute right and discretion to decide on the value of the Works carried out by [either plaintiff] regardless of any quotation, price or other quote or agreement” and “[either plaintiff] agrees not to challenge [Jurong]’s right or discretion unless and only if the same is fraudulently given or taken by [Jurong]”. Similarly, cl 17 provided that Jurong reserved and retained “the absolute right and discretion to decide the extent of the works completed and the commercial value of the Works completed by [either plaintiff]”. The defendants relied on these clauses as a catch-all argument that they had an “absolute” discretion to assess the value of works performed by the plaintiffs provided such assessment was not fraudulent.

68. [21]

    [21] The plaintiffs disagreed, arguing that the parties agreed that the defendants could assess the value of partially completed works – however, once the work was completed and verified to be completed, the defendants could not re-assess the value of the said work again. The plaintiffs also argued that cl 17 of the CRA and SRA, properly interpreted, only allowed the defendants to decide the ambit of the WO, and had no application once work had commenced or an invoice was issued. In any event, any contractual discretion was subject to the implied term that the discretion must be exercised rationally (ie, not Wednesbury unreasonably), and not arbitrarily or capriciously. The defendants disagreed that such a term could be implied.

69. [22]

    [22] The Judge agreed with the defendants that they had a discretion to assess the value of the plaintiffs’ work. However, he agreed with the plaintiffs that such a discretion had to be exercised rationally (or, in the words of the Judge, Wednesbury reasonably), and not arbitrarily or capriciously. The defendants could not disregard evidence that work had been completed or assign a commercial value without a rational basis. Whether a particular amendment to the amount claimed was permissible therefore depended on whether the defendants had a rational basis for that amendment (Liability Judgment at [17]–[18]).

70. [23]

    [23] The question of the extent of the defendants’ contractual discretion was also relevant to the valuation disputes which arose under Type G and Type H irregularities (see below at [54]–[57]).

71. Manpower Jobs

72. Work process

73. [24]

    [24] Third, the analysis for the Manpower Jobs claims began with the work process for the Manpower Jobs. The work process was important because Type A to Type E irregularities turned principally on which records could establish the number of workers supplied and the hours that they had worked. In particular, the parties disagreed over whether the PTs were documents used and accepted in the payment process, as the plaintiffs asserted, or whether the Manpower Jobs claims had to be supported by the DTs and WTs generated through the online system operated by the defendants (“Defendants’ Online System” or “DOS”), as the defendants maintained.

74. [25]

    [25] Certain aspects of the process were not disputed. First, the defendants issued a hard-copy, computer generated Manpower WO to the plaintiffs at least one day before the job, containing a general description of the task, but without details on the number of workers or the duration of the work (Liability Judgment at [3]). Second, workers entered the defendants’ premises using a biometric security system, which involved tapping a biometric card and scanning a face/fingerprint for identification (Liability Judgment at [3]). The plaintiffs’ workers’ entries through the biometric security system were recorded as clock-in clock-out (“CICO”) data. However, the plaintiffs alleged that some workers occasionally entered by tailgating or through non-functioning gantries, which the defendants disputed asserting that was not possible (Liability Judgment at [3]). Third, the defendants operated the DOS, which was meant to record the number and names of the plaintiffs’ workers and hours they had worked; the DOS also stored the CICO data (Liability Judgment at [4]).

75. [26]

    [26] The parties differed, however, over who determined the manpower that was required and how the work performed each day was recorded. On the one hand, the plaintiffs said that the defendants’ section engineer (“Section Engineer”) instructed them on the number of workers required and that their foreman prepared a PT at the end of each day. The PT was verified and signed by the defendants’ engineer or quality control personnel, consolidated weekly and submitted to the defendants’ BP section, before being returned to the plaintiffs for billing. On the other hand, the defendants said that the plaintiffs proposed the manpower required and were obliged to generate DTs and WTs through the DOS, using information stored in the DOS (Liability Judgment at [5]–[11]).

76. [27]

    [27] The Judge did not make comprehensive findings accepting either party’s account in every disputed aspect. Instead, the Judge made findings in the course of considering Type A to Type E irregularities: whether a particular form of timesheet was contractually required, whether the disputed timesheets had been submitted by the plaintiffs, and whether the signatures on those documents were fabricated or forged.

77. [28]

    [28] Against this background, the Judge considered Type A to Type E irregularities.

78. Type A: Absence of the WTs

79. [29]

    [29] Type A irregularity raised a question of the sufficiency of the underlying documents: did the absence of a WT, without any further irregularity, prevent the plaintiffs from proving the manpower supplied? The defendants argued that, without a WT identifying the individual workers, they could not verify that those workers had entered the worksite.

80. [30]

    [30] The Judge held that the absence of a WT was not, by itself, fatal. The defendants paid for manpower according to the number of workers and hours worked, rather than the identity of the particular workers. Either a PT or a DT could therefore, in principle, establish the relevant manpower supplied and hours they had worked. However, the relevant PT or DT would not support the claim where the signature thereon was forged or fabricated (Liability Judgment at [20]).

81. Type B: Fabricated DTs or forged signatures on the DTs

82. [31]

    [31] The Type B irregularity raised a different question. The issue was not whether an authentic DT was capable in principle of proving manpower, but whether the particular DT was submitted and relied upon by the plaintiffs for their claims.

83. [32]

    [32] The defendants alleged that approximately 15,940 DTs contained reused serial numbers, misspelled headings or false, reproduced or forged signatures. The plaintiffs’ answer was that they had not submitted or relied upon those DTs; they had instead submitted PTs and had been paid on that basis. They also contended that the defendants had not called a witness with sufficient knowledge of the DOS to establish that each DT was necessarily assigned a unique serial number (Liability Judgment at [21]–[22]).

84. [33]

    [33] The Judge concluded as follows:

85. (a) PTs appeared even among the Received Documents, demonstrating that PTs had in fact been submitted for billing;

86. (b) where a PT bore an unchallenged signature of the defendants’ engineer or quality control personnel, that signature authenticated the PT and the manpower supplied and hours they worked recorded in it;

87. (c) the contracts between the parties did not prescribe any mandatory form of timesheet;

88. (d) the defendants had not proved that the DTs were submitted by the plaintiffs for billing as opposed to being documents that were generated or appended internally by the defendants;

89. (e) the Received Documents were incomplete, with missing documents and discrepancies, with the result that it was unclear whether the DTs were what the plaintiffs had submitted to the defendants when making payment claims;

90. (f) the fact that the PTs in the PSD were photocopies did not result in the Judge rejecting them, because the originals had been submitted to and would have been retained or lost by the defendants; and

91. (g) the photocopies of the PTs in the PSD were admissible under ss 67(1)(a)(i), 67(1)(a)(ii) and 67(1)(c) of the Evidence Act 1893 (2020 Rev Ed) (“EA”). Under ss 68(2)(d) and 68(2)(e) of the EA, there was no need for notice (Liability Judgment at [23]–[30]).

92. [34]

    [34] The Judge thus found that “the [p]laintiffs must stand and fall by the [PTs] disclosed in the [PSD]”. The DTs, and hence the forgery or fabrication thereof, were irrelevant in determining the plaintiffs’ entitlement to payment (Liability Judgment at [31]).

93. [35]

    [35] As the DTs were not relevant, the Judge determined the plaintiffs’ claims with reference to the PTs in the PSD. Read together, the Type A and Type B findings addressed different matters. Accordingly, while the Judge found that in relation to the Type A irregularity, a genuine DT could in principle prove the manpower that was supplied despite the absence of a WT, in relation to the Type B irregularity, the provenance of the disputed DTs did not have to be established. Instead, the plaintiffs’ claims should be tested against the PTs on which they relied, ie, those in the PSD.

94. Type C: Forged or fabricated signatures on the PTs

95. [36]

    [36] Once the Judge held that the plaintiffs’ Manpower Jobs claims stood or fell principally by the PTs in the PSD, the authenticity of the signatures on those documents became decisive. This was the subject of the Type C irregularity.

96. [37]

    [37] The defendants contended that certain signatures in some of the PTs in the DSD were forged or fabricated, relying on the expert opinion of their handwriting expert, Ms Lee Gek Kwee (“Ms Lee”), as well as the evidence of the persons whose signatures were allegedly forged (“purported signatories”). The plaintiffs adduced evidence of their handwriting expert, Ms Melanie Holt (“Ms Holt”), and contested the admissibility of the evidence of the purported signatories (Liability Judgment at [34]).

97. [38]

    [38] The Judge found that there was forgery and/or fabrication in relation to the signatures in some of the PTs. Ms Lee provided credible evidence of copy-paste fabrications and forged signatures, which the Judge accepted. He noted that Ms Holt raised only minor criticisms of Ms Lee’s methodology, which were insufficient to challenge Ms Lee’s findings (Liability Judgment at [33]). The Judge held that the evidence of the purported signatories was admissible under s 32(1)(j)(iii) of the EA. The Judge further found that any forgery and/or fabrication was the plaintiffs’ doing, as there was no other conceivable explanation otherwise. In particular, the defendants had no reason or motive to commit forgery or fabrication (Liability Judgment at [37]).

98. [39]

    [39] Thus, the Judge ruled that the PTs with impugned signatures or those too faint to examine did not entitle the plaintiffs to payment. Importantly, the Judge held that “where the defendants have successfully impugned a [PT] in the [DSD] which matches the [PT] in the [PSD], the defendants would have successfully impugned the latter timesheet” (Liability Judgment at [38]). However, the plaintiffs could nonetheless claim amounts supported by valid evidence or admissions by the defendants (Liability Judgment at [39]). The Judge rejected the defendants’ ex turpi causa defence, stating that the plaintiffs’ entitlement arose from the contracts, not the forged timesheets.

99. [40]

    [40] Hence, for each WO, the defendants had to pay either the amount they had admitted, or the sum of all the amounts in the relevant PTs in the PSD which had not been successfully impugned by the defendants, whichever was the higher. Where the defendants had paid more than they should have, the plaintiffs were liable to refund the difference (Liability Judgment at [40]).

100. [41]

     [41] The Judge clarified that the plaintiffs could not be paid for duplicate manpower (where the same workers worked on different WOs on the same day), but only if such duplication was established based on the documents within the PSD (Liability Judgment at [41]).

101. Type D: Discrepancy between DOS data and the timesheets

102. [42]

     [42] Type D irregularity related to the Manpower Jobs only. The defendants argued that the plaintiffs’ alleged supply of manpower for certain invoices as stated in WTs exceeded the number of workers recorded in the DOS. We pause to note that the defendants’ arguments below related to the discrepancy between the WTs and the data in the DOS generally, and not merely the CICO data therein.

103. [43]

     [43] The Judge found that the discrepancies did not necessarily invalidate the plaintiffs’ claims based on the PTs where signatures of the defendants’ representatives were unchallenged. According to the Judge, the premise of the defendants’ contention was that the biometric security system was accurate, which was not in fact supported by the evidence. The Judge accepted SMIY’s security manager’s testimony that workers might tailgate each other and not scan their passes (Liability Judgment at [42]). At first glance, this did not address discrepancies with data in the DOS which originated from other sources, ie, not the biometric security system.

104. [44]

     [44] However, the Judge went on to hold as follows: “In any event, … where the defendants’ representative’s signature on the [PT] is unchallenged, that representative is taken to have endorsed the number of workers on the particular day. This irregularity thus does not affect the plaintiffs’ entitlement to be paid.” The Judge’s holding in this regard did deal with the defendants’ argument based on the DOS generally: discrepancies with the defendants’ record (whether CICO data or otherwise) did not matter, so long as payment claims were made on verified PTs in the PSD. Accordingly, the primary reference was the PTs that were verified.

105. Type E: The DTs submitted under the wrong WO

106. [45]

     [45] The Type E irregularity concerned the DTs which were submitted under incorrect WOs. The question was whether those mismatches resulted from haphazard submissions by the plaintiffs or from the defendants’ subsequent reconstruction of the DSD. The Judge held that the defendants had not established that the plaintiffs were responsible for any error. It was unlikely that the defendants’ Finance Department would have approved such obviously mismatched submissions, particularly where partial payments had already been made for many of the affected WOs. The more probable explanation was that the errors arose when the defendants assembled the DSD from documents located in different places. In any event, the plaintiffs’ Manpower Jobs claims stood or fell by the PTs in the PSD (Liability Judgment at [43]).

107. STJs

108. Work process

109. [46]

     [46] Fourth, the Types F to I irregularities related to the STJs. The parties’ respective cases on the STJ work process are summarised briefly here. We discuss the work process, and its significance to the issues on appeal, in detail when we explain our decision (at [172]–[174]) below.

110. [47]

     [47] The parties agreed on the following facts about the STJs’ work processes. First, the STJs’ WOs contained only general descriptions of the tasks, with the details to be provided by the Section Engineer. Second, STJs were billed by the area completed and not the number of workers deployed. Third, the plaintiffs’ foreman decided on the number of workers for the job. Fourth, the Section Engineer was on site daily for the duration of the job (Liability Judgment at [45]). STJs usually did not require timesheets, except where additional manpower was requested by the defendants (Liability Judgment at [51]). Also, the parties did not dispute that the verification of work completed for STJs required some form of documentation and approval process.

111. [48]

     [48] One of the supporting documents in contention between the parties was the Work Completion Report. We pause to note that, in the proceedings below, the terms “Work Completion Reports” and “Job Completion Reports” appear to have been used interchangeably. For the purposes of this judgment, Job Completion Reports relate to STJs, and Work Completion Reports relate to Miscellaneous Jobs (see [9] and [11] above).

112. [49]

     [49] The parties disagreed as to who prepared the supporting documents and the precise approval process that was adopted. The plaintiffs’ case was that the supporting documents were substantially prepared by the defendants before being returned to the plaintiffs for billing. On the other hand, the defendants contended that the plaintiffs prepared the relevant documents for approval by the defendants’ representatives. We set out these competing accounts, and our conclusions on the work process, in greater detail (at [172]–[174]) below.

113. [50]

     [50] The Judge did not make a general finding that every supporting document had been prepared by the defendants. His operative findings were narrower and issue-specific. For instance, under Type F, a genuine signature by the defendants’ representative was evidence that the recorded work had been verified and, where applicable, that rework had been ordered. Under Type G, the Judge found that the defendants had admitted preparing at least some STWLs and failed to identify which STWLs had allegedly been prepared or altered by the plaintiffs. We turn to Types F to I irregularities.

114. Type F: Duplicate claims for the same work

115. [51]

     [51] Type F concerned whether similar descriptions of work at the same location under different WOs represented duplicate billing for the same work, or separate initial and remedial work.

116. [52]

     [52] The Judge held that the defendants had not proved double claiming merely by showing that similar work appeared more than once. The supporting documents bore the genuine signatures of the defendants’ Section Engineer and Project Manager, indicating that the work had undergone at least two levels of verification. Progress payments had also been made under some of the affected invoices. Further, the later work could have constituted rework or remedial work, and the date appearing in a supporting document was not necessarily the date on which the physical work had been performed. The defendants’ witness alleging duplication had not personally supervised the work, and the engineers who had done so were not called to substantiate the allegation (Liability Judgment at [53]–[57]).

117. [53]

     [53] The Judge separately considered four WOs whose supporting documents contained allegedly forged signatures. Where forgery was proved, the plaintiffs could not recover the outstanding amount supported by the forged document. They could nevertheless retain progress payments which had themselves been genuinely approved and recover any amounts supported by unrelated genuine documents (Liability Judgment at [58]–[65]).

118. Type G: Inflated claims for manpower

119. [54]

     [54] The Type G irregularity raised two distinct questions. The first was factual: had the plaintiffs fabricated or altered the STWLs to inflate the quantities claimed? The second was contractual: even if the plaintiffs had not altered the documents, were the defendants entitled under cll 9(a) and 17 of the CRA and SRA to revise the quantities, rates or amounts payable?

120. [55]

     [55] On the first question, the Judge held that fabrication by the plaintiffs had not been proved. The defendants admitted that handwritten corrections had been made internally after the plaintiffs submitted an STWL approved by the Section Engineer. The defendants had also failed to identify which STWLs were said to have been prepared by the plaintiffs. The signed STWL submitted by the plaintiffs indicated that the Section Engineer had performed the relevant checks, while the unsigned version in the defendants’ internal records was accorded little weight (Liability Judgment at [66]–[67]).

121. [56]

     [56] On the second question, the Judge held that the defendants were entitled to pay the amended amount where the amendment represented a rational exercise of their contractual discretion. In this regard, the defendants’ standard tariff rates constituted a rational basis for amendment. Most amendments therefore stood because the plaintiffs had not specifically proved them to be irrational, arbitrary or fraudulent. The exception was WO 17036146, where the amended figures were not supported by the asserted tariff basis; for that WO, the plaintiffs were entitled to the unamended amount (Liability Judgment at [68]).

122. Type H: The STJ WCRs bore inflated claims

123. [57]

     [57] Type H concerned the same valuation issue as Type G, but in relation to WCRs rather than STWLs. As the defendants’ standard tariff rates provided a rational basis for the amendments, and the plaintiffs did not specifically prove that the amendments were irrational or fraudulent, the plaintiffs were entitled only to the amended amounts (Liability Judgment at [69]).

124. Type I: Overcharging for work

125. [58]

     [58] Type I concerned whether a final claim could be rejected merely because it was substantially greater than the sum that was paid out or percentage of completion reflected in an earlier partial payment request. The Judge found that an earlier progress-payment request was neither a final valuation nor a cap on the amount ultimately payable. The plaintiffs were entitled to the final sums so long as the works done were verified and approved by the defendants and supported by defendants’ representatives’ undisputed signatures which were not impugned (Liability Judgment at [70]).

126. Miscellaneous Jobs

127. Work process

128. [59]

     [59] Fifth, the Judge considered the work processes for Miscellaneous Jobs together with Type J irregularity. We only state the parties’ positions broadly here. The work process and its relevance to the appeal are discussed in detail (at [196]–[197]) below.

129. [60]

     [60] The parties broadly agreed that the relevant WO contained only a general description of the service, that the Section Engineer supplied the necessary details orally, and that the plaintiffs prepared supporting documents for verification. The defendants verified and approved the Miscellaneous Jobs before making payment to the plaintiffs (Liability Judgment at [71]–[72]).

130. Type J: Unverified supporting documents for the Miscellaneous Jobs

131. [61]

     [61] The defendants argued that 18 invoices for the Miscellaneous Jobs should be invalidated as they lacked the necessary supporting documents: the plaintiffs only submitted JCRs or TSTs; the defendants never received any delivery orders. Even the JCRs and TSTs were received only after the commencement of the proceedings. Those documents on their own could not serve as proof of work done as they did not contain the defendants’ representatives’ signatures (Liability Judgment at [73]).

132. [62]

     [62] The plaintiffs contended that they had lost the delivery orders but had submitted the necessary supporting documents for the 18 invoices to the defendants. They were not required to provide any documents bearing any of the defendants’ representatives’ signatures. The defendants failed to raise the issue of missing supporting documents until after proceedings were commenced even though the invoices dated as far back as 10 March 2017 (Liability Judgment at [73]–[74]).

133. [63]

     [63] The Judge determined the Type J claims with reference to the burden of proof and the surviving documents. The plaintiffs bore the burden of proving that the services had been performed. The JCRs bore only the plaintiffs’ representatives’ signatures, while the TSTs were unsigned. Those documents were insufficient to establish that the services represented by the 18 invoices had been rendered. The Judge therefore found that the plaintiffs’ claims under those invoices therefore failed (Liability Judgment at [73]–[74]).

134. The Non-Invoiced STJs

135. [64]

     [64] Sixth, Lanka separately claimed $541,152.19 on a quantum meruit basis for 12 allegedly completed but Non-Invoiced STJs. This claim is different from their claim on the invoiced STJs (for which the defendants pleaded irregularities). This issue therefore returned to the STJ approval process. Lanka said that three WCRs were pending approval by the Section Engineer, eight had been approved by the Section Engineer but awaited the Project Manager’s approval, and one did not require the Project Manager’s approval (Liability Judgment at [75]).

136. [65]

     [65] The Judge considered that Lanka’s position as set out above was inconsistent with its evidence that a WCR submitted for processing would be returned to them for billing only after the necessary signatures had been obtained. Lanka had also failed to call the relevant foreman to prove that the work had been performed. Lanka therefore failed to prove submission of the WCRs or completion of the work in respect of 11 WOs. The claim succeeded only for the WO which did not require the Project Manager’s signature, subject to the authenticity of the Section Engineer’s signature being established (Liability Judgment at [76]–[77]).

137. Whether the entire claim should be struck out for forgery

138. [66]

     [66] The defendants relied on the established forgeries in two conceptually distinct ways. First, under the Type C irregularity, they invoked ex turpi causa to contend that the plaintiffs should recover nothing under a WO affected by forged evidence (see above at [39]). As explained above, the Judge rejected that argument because the contractual entitlement arose from the underlying contracts and could be supported by genuine evidence or admissions. Second, the defendants contended that the entire action should be struck out as an abuse of process. At this juncture, we note that the Judge separately addressed the defendants’ contention that the entire claim should be struck out for forgery; by contrast, we think that this issue should have been dealt with under the Manpower Jobs because the principal forgery analysis arose there, while the STJs’ and Miscellaneous Jobs’ irregularities largely concerned different questions of duplication, valuation and proof. This is the approach that we will take below (at [155]–[169]).

139. [67]

     [67] The Judge accepted that the plaintiffs had forged or fabricated some signatures but held that their misconduct had not corrupted the trial process to such a degree that a fair trial was impossible. The defendants had been able to identify and impugn a considerable number of the documents, while other claims did not depend on forged evidence. The Judge therefore declined to strike out the plaintiffs’ entire claim (Liability Judgment at [78]).

140. Administrative charges on partial payments

141. [68]

     [68] Finally, as mentioned above (at [15]), there were three parts to the defendants’ counterclaim: first, for moneys they paid which the plaintiffs were not entitled to due to the ten types of irregularities; second, for administrative charges under the Administrative Charges Agreements; and third, the Suit 1042 counterclaim (which was addressed in the Quantum Judgment). The first part has been addressed through the Judge’s conclusions on the irregularities pleaded by the defendants (see [29]–[63] above).

142. [69]

     [69] As for the second part, the Judge held that the Administrative Charge Agreements entitled the defendants to charge 1% of each qualifying partial payment, subject to the contractual aggregate cap of 4%. The defendants could claim such charges only in respect of partial payments made on or after 27 July 2018; they had not proved any contractual entitlement to charges on earlier payments (Liability Judgment at [79]–[80]).

143. Summary of Decision Below – Liability Judgment

144. [70]

     [70] In the result, the Judge approached the dispute as a WO-by-WO enquiry into what work had in fact been done, what documents were operative for payment, and what weight could be given to the competing document bundles, ie, the PSD and the DSD.

145. [71]

     [71] For the Manpower Jobs, the Judge held that the plaintiffs’ claims had to stand and fall by the PTs disclosed in the PSD, while the disputed DTs in the DSD were irrelevant to those claims. He further found that some PTs had forged or fabricated signatures, but that genuine signatures, admissions, and properly proved documents could still support the plaintiffs’ claims, subject to the exclusion of duplicate manpower found within the PSD itself.

146. [72]

     [72] For the STJs, the Judge rejected the defendants’ allegations of Types F to I irregularities but accepted that the defendants’ discretion to value the plaintiffs’ works rationally could justify amendments to amounts claimed, save in the case of one WO where the amended figures lacked a proper tariff basis.

147. [73]

     [73] For the Miscellaneous Jobs, the plaintiffs failed under Type J irregularity because the surviving supporting documents did not sufficiently verify that the services in the 18 invoices had been performed.

148. [74]

     [74] For the plaintiffs’ separate claim for the 12 Non-Invoiced STJs, it succeeded only in part because they did not prove submission or completion for 11 of those WOs.

149. [75]

     [75] The defendants’ broader argument to strike out the plaintiffs’ entire claim was rejected because the forged or fabricated documents did not show that the entire trial process had been corrupted.

150. [76]

     [76] The defendants succeeded on their administrative charges counterclaim only as regards the partial payments made after the Administrative Charge Agreements took effect (ie, 27 July 2018).

151. [77]

     [77] The Judge accordingly allowed both the plaintiffs’ claims and the defendants’ counterclaim (excluding the Suit 1042 counterclaim which was addressed subsequently in the Quantum Judgment) in part. He ordered the parties to jointly calculate the quantum of damages that each party owed to the other based on the Liability Judgment, with liberty to apply in case of disagreement (Liability Judgment at [82]).

152. Decision Below – Quantum Judgment

153. [78]

     [78] On 13 March 2025, the Judge delivered the Quantum Judgment. In respect of the Suit 1042 counterclaim, the Judge first rejected the plaintiffs’ submission that the defendants could not rely on the DSD, holding that the relevant findings in the Liability Judgment applied only to the plaintiffs’ claims and not to the Suit 1042 counterclaim. The Judge reasoned that the plaintiffs “had the opportunity to produce the [PTs] in respect of the Suit 1042 counterclaim but did not do so” [emphasis added] and hence allowed the counterclaim for all the timesheets impugned by Ms Lee (Quantum Judgment at [11]).

154. [79]

     [79] The Judge then noted that there was a discrepancy between the parties’ respective positions on the number of hours and rate charged for 13 of the WOs that formed the Suit 1042 counterclaim (Quantum Judgment at [13]). However, these discrepancies “could clearly have been resolved by the parties” as both the number of payment hours and the rate of payment per payment hour should not be in dispute (Quantum Judgment at [14]–[15]). The Judge therefore directed the parties to reach agreement on the sums in respect of those 13 WOs, failing which the parties were to jointly appoint an independent accountant to calculate the sums, whose calculations would be final and binding on the parties (Quantum Judgment at [15]). The sum payable to the plaintiffs, excluding the 13 WOs in dispute, was assessed by the Judge to be $19,804,242.45‬.

155. [80]

     [80] We pause to observe that we have reservations in relation to the Judge’s direction for the parties to appoint an independent accountant to adjudicate disputes between the parties. While the Judge was undoubtedly seeking to resolve the disputes quickly and efficiently, unless the parties consent, directing the appointment of a third party such as an independent accountant to conclusively resolve the parties’ differences whether that be in relation to liability or quantum would appear to be an impermissible delegation of the court’s duty to determine all the disputes between the parties: Shipworks Engineering Pte Ltd v Sembcorp Marine Integrated Yard Pte Ltd [2025] SGHC(A) 19 at [53]–[55]. As none of the parties took issue with the Judge’s direction in this appeal, we say no more about it.

156. Judge’s decision on pre-judgment interests and costs

157. [81]

     [81] Subsequently, counsel for the plaintiffs and the defendants respectively wrote to the court to seek pre-judgment interest on 18 March 2025 and 28 March 2025 respectively.

158. [82]

     [82] The Judge conveyed by letter to the plaintiffs’ counsel on 20 March 2025 his decision to reject the plaintiffs’ request for pre-judgment interest. The Judge stated that “[t]he action was tainted by [the] plaintiffs’ forgeries and false claims, and thus d[id] not merit the court’s discretion to grant pre-judgment interest in its favour”.

159. [83]

     [83] The Judge conveyed by letter to the defendants’ counsel on 2 April 2025 his decision to partially allow the defendants’ request for pre-judgment interest in respect of excess payments that had been sought and allowed in the counterclaim. The Judge refused to award pre-judgment interest from the date of payments (see above at [40]; Liability Judgment at [40]). The Judge reasoned that the defendants had made those payments without carrying out satisfactory checks. Indeed, the defendants admitted discovering the excess payments only after the plaintiffs had commenced proceedings. Thus, pre-judgment interest of 5.33% annum was awarded only from the date on which the defendants filed their original Defence and Counterclaim (23 February 2021) until the date on which the Liability Judgment was released (13 March 2025).

160. [84]

     [84] Further, since the defendants only claimed for the administrative charges in the first amendment to their Defence and Counterclaim, the Judge awarded pre-judgment interest of 5.33% per annum from the date on which the Defence and Counterclaim (Amendment No 1) was filed (24 April 2021) to the date on which the Liability Judgment was released (13 March 2025).

161. The parties’ cases on appeal

162. [86]

     [86] In essence, the parties’ cases on appeal are as follows:

163. (a) In AD 36, the plaintiffs argue that the Judge erred in: (i) finding that forgery tainted their claims; (ii) allowing the defendants’ Suit 1042 counterclaim; (iii) disallowing their claims for payment in relation to the Miscellaneous Jobs; (iv) disallowing their claims for eight of the Non-Invoiced STJs; (v) awarding administrative charges to defendants on partial payments; and (vi) refusing to award them pre-judgment interest or awarding excessive pre-judgment interest to the defendants.

164. (b) In AD 42, the defendants argue that the Judge erred in: (i) his findings on the work processes; (ii) accepting the plaintiffs’ documents over the defendants’ documents in the PSD and DSD respectively; (iii) refusing to strike out the claim for forgery; (iv) implying a rationality requirement on the exercise of their absolute contractual discretion; (v) dismissing parts of their counterclaim (see above at [15], [16(c)], [68]–[69] and [78]–[79]); and (vi) refusing to award a higher pre-judgment interest on that part of their counterclaim which succeeded.

165. Issues to be determined

166. [87]

     [87] Seven key issues arise for determination in the appeals. Before setting them out, it is useful to explain why we framed the issues in this manner. The parties’ cases on appeal, much like the decision below, tended to address discrete points without returning to first principles. In our view, the proper analytical framework requires the court to first identify the operative document for each category of work, and then ask, in sequence, whether that document had been authenticated, whether it had been shown to be forged, and what consequences followed in each case. This framework also governs the Suit 1042 counterclaim.

167. [88]

     [88] For the Manpower Jobs, the first question is which document governs the payment process. The answer determines the evidential basis on which the plaintiffs’ claims stand and fall, and equally the basis on which the Suit 1042 counterclaim is to be assessed. Once the operative document is identified, two further questions arise. The first is whether the document’s authenticity was properly put in issue. The second is if it had been, whether authenticity was established on the evidence. These are distinct inquiries. Equally important is the distinction between establishing authenticity and proving forgery: the burden of the former lies on the party relying on the document (provided authenticity was properly put in issue), while the burden of the latter lies on the party alleging it. These burdens operate independently of each other though the factual inquiry may be co-related as it was on the facts of the present case.

168. [89]

     [89] For the STJs and Miscellaneous Jobs, the central question is more straightforward: whether the work was done, since these were pleaded either mainly or alternatively in quantum meruit. Given that the claim rested primarily in quantum meruit, the parties’ dispute over the supporting documents for these categories of work was ultimately a dispute about the evidence of performance, not about which document was operative. Here the key point is that where the defendants’ own representatives had signed off on supporting documents, those signatures represent a contemporaneous verification of the work done, and the defendants could not subsequently deny performance without addressing the evidence of performance as shown by those documents. The same principle applies to the defendants’ failure to challenge the authenticity of those signatures.

169. [90]

     [90] Finally, discrete issues arising from the defendants’ counterclaim for administrative charges, the defendants’ discretion under cll 9(a) and 17 of the CRA and SRA, and the question of pre-judgment interest, are addressed separately at the end.

170. [91]

     [91] The seven key issues are therefore as follows:

171. (a) In relation to the Manpower Jobs:

172. (i) What were the operative documents for payment claims, where there were conflicting records relating to the same WO in the same time period?

173. (ii) Was the authenticity of the documents in the PSD put in issue and was the authenticity of the documents in the PSD and DSD proven?

174. (iii) What is the relevance of the defendants’ failure to challenge the signature of the defendants’ representatives in a document in the PSD or DSD, to the question of whether the work evidenced in the document was done? What is the consequence, if any, of the defendants’ failure to challenge the signature of their representatives in the relevant document that serves as a record of the work that was carried out and the workers that were involved?

175. (iv) Whether the plaintiffs’ entire claim should be struck out for forgery, as the defendants argue? We note that the Judge dealt with this as a discrete issue (see above at [66]). However, as mentioned, it should have been dealt with under the Manpower Jobs because the principal forgery analysis arose there.

176. (b) In relation to the Sub-Task Jobs, has Lanka discharged its burden of proof that the Non-Invoiced Work was done?

177. (c) In relation to the Miscellaneous Jobs, have the plaintiffs discharged their burden of proof that the work was done?

178. (d) In relation to the administrative charges:

179. (i) under what circumstances were the defendants entitled to levy the administrative charges; and

180. (ii) how were the administrative charges to be calculated.

181. (e) In relation to the defendants’ discretion under cll 9(a) and 17 of the CRA and SRA: whether cll 9(a) and 17 gave the defendants absolute discretion to assess (i) the extent of works carried out and (ii) the commercial value of work.

182. (f) Whether the Judge erred in allowing the defendants’ Suit 1042 counterclaim on the basis that the plaintiffs had failed to produce the relevant documents to disprove the Suit 1042 counterclaim.

183. (g) Finally, whether the Judge’s findings on pre-judgment interest in relation to either the plaintiffs’ claim or the defendants’ counterclaim should be disturbed.

184. Our decision

185. Manpower Jobs

186. [92]

     [92] We begin with the Manpower Jobs. As we have mentioned (at [9(c)(i)] and [11(c)(i)]) above, the plaintiffs relied on copies of the PTs, DTs and WTs, while the defendants relied on a mix of originals and copies of the PTs, DTs and WTs. In most instances, the parties relied on different types of supporting documents. Specifically, for many WOs, the plaintiffs relied on the PTs while the defendants relied on the DTs. In these situations, the question is which documents were operative for the purpose of making and processing payment claims. In our judgment, the Judge rightly found that the PTs were the operative documents: as long as they were properly prepared, they contained an accurate record of the number of workers and the hours they had worked. Once that is accepted, the Types A, B, D and E irregularities fall away. Types A, B and E are contingent on the DTs and WTs being the operative document. The Type D irregularity is fundamentally inconsistent with PTs being an accurate and relevant contemporaneous record.

187. [93]

     [93] Regardless of the type of supporting document that the plaintiffs are relying on to establish their claim, there are two relevant issues. First, since the plaintiffs only adduced copies, are they entitled to prove the PSD by secondary evidence under s 67 of the EA? Second, did the plaintiffs establish authenticity of the PSD? In so far as the supporting documents in the PSD were the PTs, we answer both questions in the affirmative.

188. [94]

     [94] However, that does not mean that all the PTs in the PSD should be accepted. In particular, if the defendants are able to show that some of the PTs were forged, those PTs would then not support the plaintiffs’ claim. This is a crucial point. This is because it was always open to the defendants to establish that the PTs in the PSD were forged. If they had done that, the basis of the plaintiffs’ claim would have been undermined as the plaintiffs rely solely on the PTs in the PSD in support of their claim. However, as it will soon become clear, the defendants did not instruct Ms Lee to examine the PTs in the PSD. It is unclear to us why the defendants made this decision. As the following discussion will show, their focus was solely on the documents in the DSD, with the result that the defendants only managed to lead evidence on those PTs in the PSD for which there are identical versions in the DSD. No evidence was led on all the other PTs in the PSD. This is the last issue we deal with in our analysis of the Manpower Jobs: whether any PT in the PSD is shown to be forged. In our view, Type C irregularity affects the plaintiffs’ claim in so far as a PT in the PSD is shown to be forged where an identical PT exists in the DSD and the Section Engineer’s signature on the latter has been shown to be forged.

189. [95]

     [95] Accordingly, in our view, the PTs in the PSD support the plaintiffs’ claims save where the defendants have proven that the signature of the Section Engineer in identical PTs in the DSD has been forged. To this extent, we depart from the Judge’s conclusion that the defendants would have successfully impugned the PTs in the PSD which match PTs in the DSD where the signatures of the defendants’ representatives (ie, either the Section Engineer or the section manager at the BP Section (“Section Manager”)) in the latter have been shown to be forged. We elaborate.

190. The PTs were the operative documents

191. [96]

     [96] The first question is whether the PTs or the DTs/WTs were the operative documents for payment claims for Manpower Jobs. We agree with the Judge that the PTs were the operative documents for the Manpower Jobs (Liability Judgment at [23]–[31]). In other words, where a PT was prepared, it was the defining document for the work process (particularly on the work that was carried out, and the number of workers deployed and the hours they had worked) and for supporting the plaintiffs’ payment claims.

192. (1) Work process

193. [97]

     [97] Before explaining why, in our judgment, the PTs were of significance between the parties, it is necessary first to set out the work process for the Manpower Jobs:

194. (a) The defendants would issue a hard-copy, computer-generated WO to the plaintiffs (Liability Judgment at [3]). This is not challenged on appeal.

195. (b) The defendants would record a number in the DOS manually which purported to represent the number of workers who were actually present and working on the defendants’ worksite that day, for a particular WO (“Reported Quantity”). In our view, the Judge erred in finding that the Reported Quantity originated from the plaintiffs’ foreman (see Liability Judgment at [4]). That finding is not sustainable when the accuracy of the Reported Quantity is considered. For instance, in relation to WO 16015831, the DOS does not show any worker attending before 7 March 2017. However, the defendants made progress payments for the WO for work periods prior to 7 March 2017, starting as early as 1 July 2016. Under cross-examination, the defendants’ assistant section manager from the BP Section, Mr Woi Cha How (“Mr Woi”), confirmed that there must have been workers onsite during those work periods, contradicting the Reported Quantity. There was no reason for the plaintiffs to under-report numbers, if the information indeed came from the plaintiffs’ foreman.

196. (c) Each day, the plaintiffs’ foreman would record the attendance of the workers in the PTs (Liability Judgment at [6]). The plaintiffs’ foreman would then sign the PTs and bring the original hard copy to the Section Engineer/quality control personnel, who were onsite, for verification and signature, which was done in each case where the defendants have not successfully disowned or otherwise impugned the Section Engineer’s signature (Liability Judgment at [6], [24] and [26]).

197. (d) Each week, the original hard copies of the daily PTs that were verified and signed by the Section Engineer/quality control personnel would be consolidated and submitted to the defendants’ BP Section (Liability Judgment at [7]). The consolidated PTs would be approved and signed by the defendants’ Section Manager (not the Section Engineer). After one to two weeks, the originals of the verified and signed PTs would be returned to the plaintiffs for the purpose of submitting payment claims.

198. (e) When making their payment claims, the plaintiffs would submit to the defendants: (i) the original WO, (ii) the original PTs that were verified and signed by the Section Engineer/quality control personnel and the Section Manager, and (iii) either (A) a final invoice, or (B) a partial invoice (together with a request form for partial payment) (see Liability Judgment at [12]–[13]).

199. [98]

     [98] While this process was generally followed, there were occasions when it was not (see Liability Judgment at [11]). For example, when specifically requested by the defendants, the plaintiffs would generate and print the DTs from the DOS. The DTs would then reflect the Reported Quantity. The WTs were also prepared through the DOS as well to supplement the DTs.

200. (2) The PTs are more accurate and reliable than the DTs/WTs

201. [99]

     [99] As a matter of work process, it is clear to us that the PT was the operative document, where it was prepared. Compared to the DTs/WTs, the PTs were a much more accurate and reliable record of the number of workers for a WO on a given day.

202. [100]

     [100] As regards accuracy, the evidence clearly shows that the DOS had shortcomings. To begin with, the DOS contained CICO data which should arguably have been the most accurate. However, the defendants themselves did not rely on the CICO data as the correct record, because the defendants probably knew, as the plaintiffs point out, that some of the gantries were not functional, there were additional workers whom the plaintiffs sourced from subcontractors and who did not have biometric cards, and the incidences of tailgating. We note that, on appeal, the parties disputed whether there was in fact tailgating among the plaintiffs’ workers. In our view, this is a red herring as the defendants themselves do not rely on the CICO data. Instead, the defendants rely on the Reported Quantity as the accurate record of the number of plaintiffs’ workers on the ground on any given day. While this may mitigate the concerns with the automatically generated CICO data, even the manually entered Reported Quantity has been shown to be inaccurate. In this regard, as noted (at [97(b)]) above, the example of WO 16015831 illustrates the inaccuracy of the Reported Quantity information in the DOS.

203. [101]

     [101] As regards reliability, the PTs are clearly superior because they were verified by the defendants’ representatives. The verification happened at two levels: first on a daily basis by the Section Engineer/quality control personnel who were onsite, and second, on a weekly basis by the Section Manager at the BP Section. As we alluded to (at [95] above), the defendant’s representative’s signature represents a genuine and informed endorsement of the number of workers and the numbers of hours they clocked on a particular day as recorded in the signed PT: Liability Judgment at [24] and [42]. Mr Lee Kwang Yong (“Mr Lee”), the defendants’ manager in the PCPD at the material time, admitted under cross-examination that the defendants’ supervisors on the ground “kn[e]w exactly how many workers are on the ground for which contract doing what work” and “kn[e]w what they are signing because they kn[e]w exactly what manpower was supplied”. In contrast, the DT does not, on its face, appear to have been prepared with the involvement of the plaintiffs. The only signature is that of the defendants’ representatives. The evidence on whom the handwritten marks belonged to was also inconsistent and equivocal. The PTs therefore represented the best and most reliable record of the number of workers and the hours they clocked for the relevant WO on any given day.

204. (3) The defendants made payments on the PTs

205. (A) The PTs were accepted at the material time

206. [102]

     [102] That the PTs were the operative documents is further reinforced by the fact that the defendants made payments relying on them.

207. [103]

     [103] It is undisputed that the defendants received PTs in support of some of the plaintiffs’ invoices. In fact, it is also undisputed that the defendants made some partial payments where the plaintiffs submitted PTs. Mr Lee admitted in cross-examination that the defendants paid the plaintiffs not on the basis of the CICO data of the DOS, but rather, on the basis of the PTs. Therefore, payments were made based on the PTs that were submitted in support of payment claims – so the critical question here is whether the defendants paid out pursuant to the PTs knowingly. If they did, the defendants’ case that the PTs were unauthorised supporting documents cannot be sustained.

208. [104]

     [104] In this regard, the defendants say that, at the material time, they had not verified the supporting documents or whether work had in fact been done (see [18] above). In other words, they did not knowingly use the PTs to process payments. It was only when preparing for Suit 1040 that they reviewed the documents they had received from the plaintiffs and realised that they had erroneously made payments pursuant to the unauthorised PTs. To this end, the defendants assert that they had made advance payments and not progress payments. They did not therefore ascertain or verify that the works and services had indeed been performed. We disagree with the defendants. The Judge correctly found that the partial payments were progress payments (Liability Judgment at [14]).

209. [106]

     [106] Further, the defendants’ multi-layered approval system for approving and making payments buttresses the conclusion that the PTs were accepted as supporting documents. It is simply not credible that this system, which was – by Mr Chow’s own account – designed to ensure the integrity of the payment process, repeatedly approved payments without anyone at any level noticing or objecting to the fact that the supporting documents for the claims were the PTs, and not the DTs/WTs (which the defendants say were the only authorised supporting documents).

210. [107]

     [107] The defendants did not merely permit the plaintiffs’ submission of the PTs without protest; they made progress payments on the basis of each PT. In the circumstances, we are satisfied that the defendants accepted the submission of the PTs by the plaintiffs.

211. (B) The PTs were authorised at the material time

212. [108]

     [108] The defendants pleaded that the submission of the PTs for payment claims was not authorised. That raises two key questions. First, why would the plaintiffs then submit the PTs in support of their payment claims? It must surely be in the plaintiffs’ interest to submit an authorised document to facilitate payment. Second, if the PTs were unauthorised, why did the defendants not reject them or put out to the plaintiffs that they were non-compliant? These questions were never answered by the defendants, apart from making the general point that they never noticed that that they made payments on the basis of the unauthorised documents (ie, the PTs) until after proceedings were commenced, which we found to be a completely unsatisfactory and indeed absurd explanation.

213. [109]

     [109] In any case, we are satisfied that there was a general authorisation for the submission of the PTs by the plaintiffs. This is corroborated by the Manpower Quotations, which were agreements for the plaintiffs to supply additional manpower to the defendants. Clause 5 of the “Terms & Conditions” provided that “[Lanka] daily timesheets [were] to be prepared manually by [Lanka] and must be verified and approved by [the defendants’] representatives upon job completion”. Both the reference to Lanka’s timesheets and the manual preparation thereof make it quite clear that the parties were referring to the PTs and not the DTs/WTs.

214. [110]

     [110] The defendants take issue with Mr Navin Kumar’s evidence that the Manpower Quotations recorded an agreement (“Alleged Agreement”) between Mr Navin Kumar, on behalf of the plaintiffs, and Mr Gan Hon Keng, the defendants’ Section Manager, that additional manpower would be sourced from the plaintiffs’ subcontractors and the PTs would be used to record such manpower since they would not be tagged to the plaintiffs on the DOS. The defendants argue that the Manpower Quotations predated the Alleged Agreement and hence could not have recorded it as such. We think that this misses the point. Whatever may be the relationship between the Manpower Quotations and the Alleged Agreement, the Manpower Quotations provided a contractual basis for the submission of the PTs. Indeed, Mr Lee acknowledged that the Manpower Quotations permitted the plaintiffs to submit the PTs, and that there were WOs where the only timesheets submitted by the plaintiffs were the PTs.

215. [111]

     [111] In the final analysis, perhaps the strongest indicium that the PTs were the operative documents is the fact that they were acted upon by the defendants in making payments on the plaintiffs’ payment claims, never once being rejected. If indeed the DTs/WTs were understood to be the operative documents, one would have expected the defendants to withhold payment in every case where no DTs/WTs were submitted. This was never done. In the circumstances, we are satisfied that the PTs were the operative documents.

216. The PTs in the PSD were delivered to the defendants and hence proved

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