Can You Submit An Adjudication Application On A Payment Claim That Was Presented Just Before The Contract Was Terminated?

• Law Firm: Chancery Law Corporation
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Real Estate and Construction, Contract of Employment, Arbitration & Dispute Resolution, Construction & Planning
• Author: Mr Tian Luh Tan and Yap Xuan Wei
• Published date: 18 May 2023

In Builders Hub Pte Ltd v JP Nelson Equipment Pte Ltd [2023] SGHC 120, the adjudicator dismissed an adjudication application on the basis that there was no jurisdiction to hear the dispute as the contract was terminated. Dissatisfied, the claimant applied to set aside the adjudication determination. Teh Hwee Hwee JC set aside the Adjudication Determination and remitted it back to the adjudicator.

Key facts. The claimant is Builders Hub Pte Ltd ("BH"), and the defendant is JP Nelson Equipment Pte Ltd ("JP") (at [2]). BH was awarded a contract ("Contract") by JP which incorporated the REDAS Design and Build Conditions of Contract (3rd Ed, October 2010) (the "REDAS Conditions") (at [3]).

The salient events are as follows (at [5] - [9]):

• On 18 August 2022, BH served Payment Claim 40 ("PC 40") on JP.
• On 22 August 2022, BH sent a letter to JP alleging various repudiatory breaches of the Contract by JP.
• On 25 August 2022, JP replied to BH's letter, rebutting the allegations and accusing BH of committing several acts of repudiation in relation to the Contract.
• On 26 August 2022, BH replied to say that it was accepting the alleged repudiatory breach of contract by JP.
• On the same day, JP responded and purported to terminate BH's employment for the Project under cl 30.2.2 of the REDAS Conditions by issuing a notice of termination under that clause.
• BH sent a further letter stating that JP's purported termination was "too late" as JP "cannot terminate a contract in the afternoon that has already come to an end in the morning" and "cannot rely on clauses in a contract that has already been repudiated".
• On 15 September 2022, JP served Payment Response ("PR 40") in response to BH's PC 40, asserting that BH owed JP a sum.
• On 22 September 2022, BH made an adjudication application ("SOP/AA 164 of 2022") in respect of PC 40 under s 13(1) of the Building and Construction Industry Security of Payment Act 2004 (2020 Rev Ed) ("SOPA").

So, was BH precluded from applying for adjudication of PC 40 after 26 August 2022 (the "Date of Termination"), although PC 40 itself was validly served prior to the contractual termination event (at [27(a)])?

The effect of subsequent termination on the payment claim. Teh JC considered Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte Ltd [2019] 2 SLR 189, Shimizu Corp v Stargood Construction Pte Ltd [2020] 1 SLR 1338 ("Shimizu") and Orion-One Residential Pte Ltd v Dong Cheng Construction Pte Ltd and another appeal [2021] 1 SLR 791...