Under Section 13(3)(a) Building Construction Industry Security of Payment Act 2004 ("SOPA"), an adjudication application "must be made within 7 days after the entitlement of the claimant to make an adjudication application first arises under section 12".
In the latest judgment of H P Construction & Engineering Pte Ltd v Mega Team Engineering Pte Ltd [2023] SGHC 298, the General Division of the Singapore High Court ("High Court") has decisively ruled that the s 13(3)(a) eligibility time period starts on the day after the end of the dispute settlement period and ends seven days after that day (i.e. eight days in total), thereby resolving a long-standing controversy surrounding how this time period ought to be calculated.
Shook Lin & Bok Partners Joseph Tay and Shirin Swah successfully acted for the Defendant in matter.
Facts
The Claimant, H P Construction & Engineering Pte Ltd ("H P Construction"), engaged the Defendant, Mega Team Engineering Pte Ltd ("Mega Team"), to supply labour for certain works in a construction project. On 30 May 2023, Mega Team served Payment Claim No. 15 ("PC") on H P Construction.
H P Construction was to issue a payment response within 21 days of the PC (ie by 20 June 2023) but failed to do so. The dispute settlement period ("DSP") under section 12 SOPA thus ran from 21 June 2023 to 27 June 2023. H P Construction did not provide a response nor take any steps to resolve the matter within the DSP.
On 6 July 2023, Mega Team lodged an adjudication application (the "Adjudication Application"). On 21 August 2023, the adjudicator rendered the Adjudication Determination (the "Adjudication Determination"). The adjudicator had observed that there were conflicting authorities on the calculation of the time period and ultimately found that the Adjudication Application was not lodged out of time. A determination was then made in Mega Team's favour.
H P Construction subsequently filed an application on 28 August 2023 to the High Court to inter alia set aside the Adjudication Determination on the basis that the adjudicator had no jurisdiction to render the Adjudication Determination as the Adjudication Application was made after the end of the prescribed period under section 13(3)(a) of SOPA ("Calculation of Time Issue").
The High Court dismissed H P Construction's application to set aside the Adjudication Determination and found that Mega Team's Adjudication Application was not lodged out of time.
Calculation of Time
Section 13(3)(a) SOPA provides that an adjudication application "must be made within 7 days after the entitlement of the claimant to make an adjudication application first arises under section 12". Section 12(2) SOPA provides that the right to make an adjudication application arises if "by the end of the [DSP], the dispute is not settled or the respondent does not provide the payment response". The last day of the Dispute Settlement Period (i.e. 27 June 2023) was not in dispute. The dispute centred on when the adjudication application "first arises" and the interpretation of "7 days after the entitlement first arises".
H P Construction submitted that the time to file the Adjudication Application period commenced on 28 June 2023 at 0000 hours and ended on 5 July 2023 at 2359 hours being seven days after and excluding 29 June 2023 which was a public holiday.
Significantly, H P Construction highlighted that the literature obtained from the Building and Construction Authority as well as the Singapore Mediation Centre's checklist for the filing the Adjudication Application both appeared to provide for a seven-day period aligned with H P Construction's argued timeline.
On the other hand, Shook Lin & Bok submitted on behalf of Mega Team that the time to lodge an adjudication application would be within 7 days after the entitlement first arose on 28 June 2023, being the day after the DSP ended. Therefore, the entitlement period would last until 6 July 2023 (with the public holiday excluded).
Decision
The High Court held that section 13(3)(a) SOPA should be read in its ordinary meaning and approached in two steps:-
- When does the entitlement to file an adjudication application first arise?
- What does the phrase "must be made within 7 days after the entitlement of the claimant to make an adjudication application first arises under section 12".
On the first step, the High Court found that as a matter of ordinary and common sense, the SOPA regime operates in days. In this context, the ordinary reader would conclude that the entitlement arises on the day (i.e. 28 June 2023) and not any particular minute or second of that day (i.e. 28 June 2023 at 0000). Having a day to do something would therefore mean a complete day and not only part thereof.
The High Court further held that, in respect of the phrase "within 7 days after the entitlement ... first arises", the emphasis on the word "after" meant that the period of 7-days should commence after the day the entitlement first arises. Section 50(a) Interpretation Act applied to exclude the day that the entitlement first arises from the calculation of the period of 7 days, and there was no contrary intention in the SOPA to conclude otherwise.
In light of the above, the High Court agreed with Shook Lin & Bok's submission such that entitlement to lodge an adjudication application commences on the day after the day the dispute resolution period ends and ends seven days after that day. (i.e. a total period of 8 days after the end of the dispute resolution period).
Comments
The case of H P Construction & Engineering Pte Ltd v Mega Team Engineering Pte Ltd stands as important guidance on the interpretation of section 13(3)(a) SOPA for contractors as to when the right first arises (i.e. the day after the last day of the DSP) and also the calculation of the "7 days after" said right first arises in a manner which coheres with an ordinary reading of SOPA.
Construction industry players that wish to avail themselves of the adjudication regime under SOPA can now be assured that the correct position is that they have a total period of 8 days (inclusive of the day the entitlement to lodge an adjudication application first arises) to lodge an adjudication application.
This article was authored by Joseph Tay (Partner), Shirin Swah (Partner) and Claire Tan (Associate).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
