Singapore High Court clarifies the lodgement period of adjudication applications

HP Construction & Engineering Pte Ltd v Mega Team Engineering Pte Ltd [2024] SGHC(A) 5

The Appellate Division of the Singapore High Court has clarified when an adjudication application under the Building and Construction Industry Security of Payment Act 2004 (2020 Rev Ed) (the “SOPA”) should be lodged.

In affirming the position established by the General Division of the Singapore High Court, the Appellate Division has clarified that the commencement of the seven-day period to file an adjudication application made under s 13(3)(a) of the SOPA excludes the day the entitlement arises under s 12(2) of the SOPA.

Until these proceedings, it was generally assumed that a claimant may lodge its adjudication application within seven days after the expiry of the dispute settlement period. This judgment provides clarity on the relevant timeline for making an adjudication application under the SOPA where a claimant disputes a payment response.

Facts

HP Construction & Engineering Pte Ltd (“HP”) had engaged Mega Team Engineering Pte Ltd (“Mega”) to supply labour under a building contract.

Mega submitted a payment claim to HP on 30 May 2023. Pursuant to the SOPA, HP was required to respond to the payment claim by 20 June 2023, but failed to do so.

The seven-day dispute settlement period ran from 21 June 2023 to 27 June 2023, during which time HP had still not provided a payment response. Mega computed the seven-day window period from 28 June to 6 July 2023 (excluding the public holiday on 29 June 2023). On 6 July 2023, Mega made an adjudication application under s 13 of the SOPA. On 21 August 2023, the adjudicator issued his determination.

Being dissatisfied with the adjudication determination, on 28 August 2023, HP applied to the General Division of the High Court to set it aside, inter alia, on the ground that the adjudication application was made out of time, i.e. after the seven-day period for making it under s 13(3)(a) of the SOPA.

Issue

Briefly, by s 12(2) of the SOPA, a claimant’s entitlement to make an adjudication application arises by the end of the dispute settlement period, if the payment claim dispute is not settled or if the respondent does not provide a payment response. By 13(3)(a) of the SOPA, the adjudication application “must be made within 7 days after the entitlement of the claimant to make an adjudication application first arises under section 12”.

The issue before the General Division was whether the seven-day period to file the adjudication application after the entitlement to do so arises includes or excludes that day. This affects the long-stop date under s 13(3)(a).

HP’s case is that the seven-day period includes the day the entitlement arises. Accordingly, Mega’s right to make an adjudication application would have ended on 5 July 2023 at 2359hrs. Given that Mega only made the application on 6 July 2023, it was made out of time. Under s 16(2) of the SOPA, an adjudicator must reject an adjudication application that is not made within the time period prescribed by s 13(3)(a). Accordingly, HP’s case is that the adjudication determination should be set aside.

Mega’s case is that the seven-day period excludes the day the entitlement arises. This gives Mega a long-stop date of 6 July 2023 to make the adjudication application.

The adjudicator accepted Mega’s case and proceeded to adjudicate the matter accordingly.

Decision of General Division

Applying common sense, the General Division considered that the ordinary meaning of s 13(3)(a) of the SOPA should apply. That is, the seven-day period after the entitlement arises will commence on the day after. This results in the applicant getting a period of 8 days after the expiry of the dispute settlement period to lodge an adjudication application (i.e. equating to 7 days after the day on which the entitlement to lodge an adjudication application arose).

Further, the Court also applied s 50(a) of the Interpretation Act 1965 (2020 Rev Ed) (“IA”) to the interpretation of s 13(3)(a) of the SOPA:

“unless the contrary intention appears — a period of days from the happening of an event or the doing of any act or thing is deemed to be exclusive of the day on which the event happens or the act or thing is done”. 

Mega was held to have made its adjudication application within time.

Parties’ Position on Appeal

In the Appellate Division, HP maintained its position that the seven-day period for making the adjudication application under s 13(3)(a) of the SOPA includes the day on which such entitlement first arises. HP argued that such an interpretation would promote the purpose of the SOPA which is to create a fast and low-cost adjudication for parties in dispute, and is in any case harmonious with other provisions of the SOPA, decided cases and industry practice.

Not surprisingly, Mega also maintained its counter position that the seven-day period for making its adjudication application excludes the day on which its entitlement first arose on 28 June 2023, and its adjudication application filed on 6 July 2023 was within time.

Mega further argued that s 50(a) of the IA applies in interpreting s 13(3)(a) of the SOPA, such that the computation of a period of days is to be calculated from the happening of an event, excluding the day on which the event happened. It submits that its proposed interpretation is consistent with reported cases and does not fail to promote the purpose or object underlying the SOPA. As regards other provisions of the SOPA that prescribes an act to be done within 7 days or multiples thereof, there is no logic in requiring time periods in different provisions of the same statute to be similar.

Decision of Appellate Division

The Appellate Division dismissed the appeal.

On a plain application of s 50(a) of the IA to s 13(3)(a) of the SOPA, the Court stated that there was nothing to show that s 50(a) of the IA should not be used to interpret s 13(3)(a) of the SOPA. Further, as there is no ambiguity or obscurity in the statute after s 50(a) of the IA is applied to the SOPA, reference to extraneous material to decide on the meaning of s 13(3)(a) of the SOPA is unnecessary.

The Court also referred to the decision of the Honourable Justice Chan Seng Onn in the case of Suresh s/o Suppiah v Jiang Guoliang [2016] 4 SLR 645 for the common law rule on the computation of time, i.e. that the day of the accrual of the cause of action is to be excluded from the computation of the period within which a person must act upon that cause of action.

The Court also stated that the common law rule on the computation of time is now codified in s 50(a) of the IA and has existed long before the enactment of the SOPA in 2004. Further, the SOPA was drafted against a statutory backdrop which included the principles in the IA for computation of time. If the time computation rules in s 50(a) of the IA was intended to not apply to the SOPA, it would be reasonable to expect explicit language in the SOPA to be used to convey such a contrary intention. This was however not the case.

Comment

With the SOPA being a time-sensitive statute, applying the accurate timeline is paramount.

Since the enactment of the SOPA in 2004, the practice within the building and construction industry has long relied upon assumptions gleaned from various sources of advisories. The decisions of the High Court in both Divisions are a welcomed clarity which aligns the interpretation of s 13(3)(a) of the SOPA (which is a new statute by comparison) with s 50(a) of the IA. They also demonstrate the criticality of seeking independent legal advice rather than relying on various sources of advisories in the marketplace.

Finally, the decisions also raise the impetus amongst practitioners to critically relook at erstwhile standard operating procedures concerning SOPA adjudications for assumptions on timelines that may now become questionable. One such example would be the time period allowable to an adjudicator to make the adjudication determination under 17(1), read with s 16(1) and s 16(2) of the SOPA.