Fraud Unravels All

Published date26 July 2023
Subject MatterLitigation, Mediation & Arbitration, Criminal Law, Arbitration & Dispute Resolution, White Collar Crime, Anti-Corruption & Fraud
Law FirmChancery Law Corporation
AuthorMr Tian Luh Tan and Xian Ying Tan

As the saying goes, fraud unravels all. But how much does fraud actually unravel in relation to adjudication proceedings under the Building and Construction Industry Security of Payment Act 2004? This issue is addressed in the recent case of JP Nelson Equipment Pte Ltd v Builders Hub Pte Ltd [2023] SGHC 186.

Background facts. JP Nelson Equipment Pte Ltd ("JP Nelson") engaged Builders Hub Pte Ltd ("Builders Hub") as its main contractor for a building project (the "Project") ([2]).

Builders Hub commenced an adjudication under the Building and Construction Industry Security of Payment Act 2004 ("SOPA") against JP Nelson claiming for the sum of $1,500,623.51 (including GST), which was registered as SOP/AA 009 of 2022 ([6]).

The Adjudication Determination was issued on 4 August 2022, and the Adjudicator determined that JP Nelson was liable to pay Builders Hub the sum of $847,381.92 (including GST) ([8]).

JP Nelson filed for an Adjudication Review on 11 August 2022 ([9]). The Review Adjudicator reduced the adjudicated amount payable by JP Nelson to Builders Hub ([11]).

JP Nelson then applied via HC/OA 616/2022 ("OA616") to set aside the Adjudication Review Determination and the Adjudication Determination ([12]).

According to JP Nelson, it was only after JP Nelson filed OA616 that JP Nelson discovered the alleged fraud committed by Builders Hub ([13]).

The alleged fraud. In gist, the alleged fraud pertained to five documents sent by Cappitech Engineering Pte Ltd ("Capitech") to Builders Hub (the "Five Cappitech Documents").

These Five Cappitech Documents were received by JP Nelson from Builders Hub between 22 November 2021 - 8 March 2022 ([18]), and they were sent to JP Nelson as proof that Builders Hub had paid Cappitech for the supply of air-conditioning equipment ([20]).

Pertinently, it was not disputed by Builders Hub in its 16 November 2022 email to Cappitech that the Five Cappitech Documents were false ([17], [20]).

The argument. Given the above, JP Nelson argued in OA616 that the Adjudication Determination was tainted by fraud and hence should be set aside, as "... Builders Hub had fraudulently created the Five Cappitech Documents and delivered them to JP Nelson in order to deceive JP Nelson into making a total downpayment of $155,160 to Builders Hub (the "Downpayment"). This sum amounted to 45% of the contract price (being $344,800) between JP Nelson and Builders Hub for air-conditioning systems. ..." ([23]).

The finding. Lee Seiu Kin J agreed with JP...

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