December 1, 2015
The issue before the High Court was whether a claimant could only serve one payment claim in a payment claim period, or one payment claim per reference period in a payment claim period.
“Payment claim period” refers to the period that a claimant is permitted under the contract or Reg 5(1) (where the contract is silent) to serve a payment claim.
“Reference period” refers to the period of work covered by a payment claim.
The High Court’s decision provided much clarity on this point. Only one payment claim may be served in a payment claim period. However, the court reasoned that multiple payment claims in a payment claim period may be deemed to be compliant when appropriately treated:
- Section 10(4) SOPA allows a claimant to serve unadjudicated repeat payment claims on a consolidated basis under an overarching payment claim.
- A contract could deem a second payment claim served in the same payment claim period as a substitute of the earlier payment claim.
- The contract could deem the second payment claim as having been served in the next payment claim period.
Libra Building Construction Pte Ltd (“Libra”) awarded Emergent Engineering Pte Ltd (“Emergent”) a sub-contract for the supply of labour, materials, plant and equipment for civil and structural works and wet trade finishes at Singapore Polytechnic (the “Contract”).
Emergent issued three payment claims - Payment Claim 3 (“PC3”), Payment Claim 3 Revised (“PC3R”) and Payment Claim 4 (“PC4”). PC3 and PC3R were for work done up to end November 2014, while PC4 was for work done up to end December 2014. The payment claims therefore covered different reference periods.
The Contract required all payment claims to be served on the 30th of the month. The controversy centred on the issuance of PC3R on 26 December 2014, and the issuance of PC4 on 30 December 2014 i.e. within the same payment claim period. Notably, Emergent did not withdraw PC3R when it issued PC4.
The primary question was whether PC4 was valid notwithstanding that it was served after PC3R in the same payment claim period, because it covered a different reference period from PC3R.
In Lee Wee Lick Terence v Chua Say Eng  1 SLR 401 (“Chua Say Eng”), the Court of Appeal held that the cumulative effect of section 10(1) read with Reg 5(1) of the SOP Act (“SOPA”) was to restrict the claimant to a maximum of one payment claim a month in respect of a progress payment. The question, of course, was whether the Court of Appeal meant one payment claim a month and nothing more, or one payment claim for a reference period per month.
(4) What was prohibited in Chua Say Eng was service of multiple payment claims for the same reference period in a payment claim period. This would cause prejudice and confusion as regards the service of payment responses. However, such confusion and prejudice would not exist where the payment claims were for different reference periods.
(5) Section 13(5) of the New South Wales Building and Construction Industry Security of Payment Act 1999 (“NSWA”) provided that a claimant could not serve more than one payment claim in respect of each reference date. The link drawn between the payment claim and the reference date in the NSWA suggested that section 10(1) SOPA ought to be read as limiting the Claimant to one payment claim per reference period in a payment claim, and not one payment claim in a payment claim period.
(6) Thus, PC4 was not served in breach of section 10(1) read with Reg 5(1), as it was for a different reference period.
Libra applied to the High Court to set aside the adjudication determination. The matter came before Judicial Commissioner (“JC”) Kannan Ramesh.
Kannan Ramesh JC’s reasoning and decision
(1) Chua Say Eng
(a) The Court of Appeal in Chua Say Eng shut the door on the service of multiple payment claims in the same payment claim period, regardless of whether the claims are for different reference periods or otherwise.
This is supported by the dicta at  of Chua Say Eng: “In our view, the mandatory language of reg 5(1) of the SOPR in relation to service of the payment claim, when read with s 10(1) of the Act, serves to impose a maximum frequency of one payment claim per month. It bars the claimant from making more than one monthly claim in respect of a progress payment.”
(b) However, the Court of Appeal also held at  that section 10(3) might be resorted to where payment claims were held over – a claimant must state the reference period for a payment claim. The learned JC reasoned that the Court of Appeal was expressing the view that where the claimant holds over, there should be one payment claim covering the enlarged reference period as set out in section 10(3)(a) SOPA, instead of multiple payment claims for different reference periods.
(c) In addition, the Court of Appeal in Chua Say Eng agreed at  with the observation of the Assistant Registrar at first instance that “s 10(4) was meant to widen the scope of s 10(1) by providing the option of including in a payment claim unpaid amounts made in earlier claims”, subject to those claims not having been adjudicated upon on the merits.
(d) Therefore, the Court of Appeal must have been inclined towards the view that repeat claims ought to be consolidated under an overarching payment claim, as envisaged by section 10(4) SOPA, rather than having multiple repeat claims in one payment claim period for different reference periods.
(2) Position in New South Wales
Kannan Ramesh JC noted that insofar as the right to progress payment and the entitlement to serve a corresponding payment claim are concerned, the provisions of the NSWA and SOPA are largely the same.
The learned JC reviewed a few Australian decisions, which supported the position that service of multiple payment claims for different reference periods in respect of the same reference date was not permissible, pursuant to section 13(5) NSWA. (“Reference date” under NSWA seems to be equivalent to the “payment claim period” under the SOPA.) While section 13(5) NSWA contained prohibitory language (i.e. “cannot serve more than one payment claim”) which is not found in section 10(1) SOPA, Kannan Ramesh JC opined that there was no scope for interpreting section 10(1) as permitting service of more than one payment claim, without mutilating the statutory language.
(3) Kannan Ramesh JC’s decision
Having reviewed the provisions of the SOPA, Chua Say Eng and the NSWA, Kannan Ramesh JC held that:-
Section 10(4) SOPA allows a claimant to serve unadjudicated repeat payment claims on a consolidated basis under an overarching payment claim.
The end objective must be one of streamlining the adjudication process by consolidating the claims under one roof, resulting in a consolidated payment response, and a consolidated adjudication.
Therefore, Emergent was entitled to serve only one payment claim a month. PC3R was the relevant claim for the payment claim period in December 2014. PC4, having come after PC3R in the same month, was an invalid payment claim under section 10(1) SOPA.
Separately, as to how parties may obviate inadvertent non-compliance with section 10(1) SOPA, the learned JC proffered two suggestions:
- The contract could deem that a second payment claim in time served in the same payment claim period would substitute the earlier payment claim; or
- Alternatively, the contract could deem the second payment claim as having been served in the next payment claim period, i.e. it is held over to the next progress payment, assuming that the reference periods are different.
The High Court’s decision is certainly welcome as it provides clarity on whether claimants are allowed to serve multiple payment claims in a payment claim period. While the raison d’etre of SOPA is speedy and cost-efficient recovery of progress payments, this decision shows that a balance has to be struck between the interests of the claimant and the respondent, and that Singapore courts will not hesitate to step in and safeguard against abuse of the adjudication process by claimants.