March 1, 2015
A. Summary of the case
A “must know” case for all construction industry players involved in “structural steelwork”. In Kori Construction (S) Pte Ltd v Nam Hong Construction & Engineering Pte Ltd  SGHC 25, the High Court held that the meaning of “structural steelwork” under Sub-paragraph (d), Section 2(1) of the Building Control Act (Chapter 29, 1999 Rev Ed) (“BCA”) should be read disjunctively. Therefore, builders carrying out any one of the works described under the three limbs of “structural steelwork”, namely, (i) fabrication of structural elements; (ii) erection work like site cutting, site welding and site bolting; and (iii) installation of steel supports for geotechnical building works” would need to be licensed as a “specialist builder”. These licensing requirements are not confined to geotechnical building works.
Kori Construction (S) Pte Ltd (“Kori”) subcontracted part of the work for the MRT Downtown line project to Nam Hong Construction & Engineering Pte Ltd (“Nam Hong”). Nam Hong was to carry out the “fabrication, loading and unloading of steel strutting works including connection plates and stiffeners (“the works”).
The present dispute began when Kori defaulted on one of the payments. Nam Hong subsequently sued Kori in the District Court to recover payment. In its defense, Kori argued that Nam Hong was not entitled to recover payment since Nam Hong did not possess an appropriate builder’s licence at the relevant time. More particularly, Kori argued that Nam Hong carried out structural steelwork. This constituted “Specialist building works” for which a licence was required under the BCA.
The consequences of engaging in construction work without the appropriate licence are found in Section 29B (3) and (4) of the BCA. Sub-section (3) makes it an offence for builders to carry out certain types of work under Part VA of the BCA without a licence; and Sub-section (4) prevents a builder from recovering remuneration for works done without an appropriate licence.
“Specialist building works” is defined under Section 2 of the BCA and includes structural steelwork as defined under Section 2(1)(d) of the BCA, which reads:
"structural steelwork comprising –
(i) fabrication of structural elements;
(ii) erection work like site cutting, site welding and site bolting; and
(iii) installation of steel supports for geotechnical building works”.
It was not disputed that Nam Hong had carried out works falling under limbs (i) and (ii) above but not (iii).
Hence, the question before the District Court was whether the three limbs under “structural steelwork” should be read conjunctively or disjunctively. This would determine what constitutes “structural steelwork” and whether Nam Hong required a specialist builder’s licence to carry out the works.
Nam Hong contended that the three limbs of Sub-paragraph (d) ought to be read conjunctively. This would mean that Nam Hong did not carry out “structural steelworks”, and was thus not required to possess a specialist builder’s licence. Nam Hong argued that a conjunctive reading was appropriate as Parliament had intended for “structural steelwork” to only catch geotechnical building works which were high risk and inherently dangerous. Nam Hong also contended that a sub-contractor is not defined as a builder under Section 2 of the BCA, and the definition only appeared to cover main contractors.
On the contrary, Kori argued that a disjunctive reading should be adopted.
The District Court’s decision
The District Court agreed with Nam Hong and held that the limbs of Sub-paragraph (d) were to be read conjunctively. It was reasoned that though the word “and” may be used disjunctively, the context in which the word “and” was used must be considered. The District Court concluded that the three elements listed there were not disparate items but were related and all connected to structural steelwork forming a set of associated activities. Hence, in order for a given building work to qualify as “structural steelwork” it had to encompass all three elements. Since Nam Hong did not carry out all three elements, they were not “specialist building works” and Nam Hong did not require a specialist builder’s licence. Hence Nam Hong was not barred under Section 29 (4) of the BCA from bringing a claim for non-payment. Kori appealed.
The High Court allowed Kori’s appeal and held that the three limbs comprising the definition of “structural steelwork” should be read disjunctively.
The High Court cited three main reasons.
(i) Disjunctive reading promotes the underlying purpose of the BCA
The purpose of the BCA and in particular the 2008 amendments following the Nicoll Highway collapse, was to ensure that builders who carried out high-risk work such as specialist building works have the requisite competency and professionalism to do so. Thus, the licensing regime in Part VA of the BCA was introduced in 2008 to promote that purpose. In dealing with the licensing regime under Part VA, the Minister of State who tabled the draft amendments referred generally to builders and not only to builders dealing with geotechnical building works.
A disjunctive reading would ensure that each of the works under Sub-paragraph (d) would be regulated. A builder carrying out one of the works mentioned in limbs (i), (ii) or (iii) will require a specialist builder licence. Thus, the regulation would increase the professional standards in the construction industry and ensure the safety of buildings in Singapore.
(ii) Conjunctive reading contradicts the purpose of BCA and leads to irrational results
The High Court held that the effect of a conjunctive reading would run contrary to the legislative intent of the licensing regime.
First effect of conjunctive interpretation - Contrary to Parliament’s Intention
It was concluded that Parliament could not have intended for the licensing regime to have such a narrow scope of application, i.e. that builders would only need to be licensed if all three works specified under Sub-paragraph (d) were carried out.
Second effect of conjunctive interpretation - Absurd results
By reading the three limbs conjunctively, the application of the phrase “geotechnical building works” in limb (iii) would also apply to limbs (i) and (ii) of Sub-paragraph (d). It would lead to the absurd result that licensing was required only if the works were carried out underground, when there are many building works which do not include geotechnical building works.
Third effect of conjunctive interpretation - allows builders to circumvent BCA regulations
Besides, a conjunctive reading would allow builders to circumvent licensing requirements by employing separate builders to perform separate functions under Sub-paragraph (d). It would clearly render the overall objective of the BCA otiose.
(iii) Sub-contractors who carry out specialist building works must be licensed
Although a sub-contractor is not defined as a “builder” in Section 2 of the BCA, there was a specific definition of “builder” in Part VA of the BCA in Section 29A(2)(b). That section, did not exclude sub-contractors carrying out specialist building works from the licensing regime. The BCA makes it clear that all builders, whether main contractor or sub-contractor who carry on specialist building works must be licensed.
Structural steelworks that are considered “minor specialist building works” do not require licence
The High Court held that the definition of “minor specialist building works” in Section 29A(1) of the BCA included certain types of “structural steelwork” which fulfilled certain specifications, such as:
“fabrication and erection work for structures with a cantilever length of not more than 3 metres, a clear span of less than 6 metres and a plan area not exceeding 150 square metres”.
Structural steelwork with such specifications would therefore be considered “minor specialist building works”. Therefore builders carrying out such work will not require a licence to do so since these works would be taken as “minor specialist building works”.
The effect of the High Court’s pronouncement means that all contractors, (whether sub-contractors or main contractors) carrying out the (i) fabrication of structural elements; or (ii) erection work like site cutting, site welding and site bolting; or the (iii) installation of steel supports for geotechnical building works would require specialist builder licences.
However, contractors carrying out “minor specialist building works” and general building works need not be licensed.
Contractors should take note of the Court’s stringent reading of the licensing requirements under the BCA. Much of the Court’s reasoning in the present case turned on interpreting legislature’s intent behind the amendment of the BCA. As the construction industry evolves, safety and regulatory standards will respond accordingly.