No General Right To Suspend Work For Non-Payment

• Published date: 07 September 2022
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Construction & Planning
• Law Firm: Chancery Law Corporation
• Author: Mr Tian Luh Tan and Xian Ying Tan

In the recent decision of LBE Engineering Pte Ltd v Double S Construction Pte Ltd [2022] SGHC 92, the Court re-iterated that in general, a contractor does not have the right to suspend work for non-payment unless this has been expressly provided for in the parties' contract.

Brief facts. The plaintiff-respondent was engaged by the defendant-appellant to carry out some construction work ([2]). In gist, the dispute between the parties arose when the defendant did not certify the plaintiff's fifth progress payment claim on the ground that it was submitted a day late. The plaintiff notified the defendant that they would stop work if the defendant did not certify their progress claim and pay them. As the defendant did not make payment, the plaintiff stopped work. ([5] - [6]).

Thereafter, the plaintiff sent a final progress claim, which the defendant refused to pay. The plaintiff then commenced a suit against the defendant claiming for alleged outstanding amounts. The defendant counterclaimed against the plaintiff for damages on the basis that the defendant had to engage a replacement contractor to complete the outstanding works due to the plaintiff's wrongful termination of the contract ([7]).

At first instance, the district judge found that the plaintiff was entitled to hold the defendant in breach of contract and to stop work and allowed the plaintiff's claim. The defendant appealed. ([8]).

The main issue on appeal. The main issue on appeal was whether the plaintiff was entitled to treat the defendant's non-payment of sums owed under the progress claims as amounting to a repudiation of the contract, such that the plaintiff was entitled to stop work ([11]).

The law. Referring to the cases of Jia Min Building Cosntruction Pte Ltd v Ann Lee Pte Ltd [2004] SGHC 107...