THE DIFFERENCE A “DAY“ MAKES
“What a difference a “day” makes”, so begins the High Court in Trustee of the Late Tay Choon Huat Estate v Soon Kiat Construction & Maintenance Pte Ltd [2020] SGHC 212 (“SKC”). While it may surprise some readers, the word “day” is often fought over by the parties in adjudication under the Building and Construction Industry Security of Payment Act as it can have a significant impact on the adjudication proceedings.
“Day“ versus “Day“. Under s. 2 of the Building and Construction Industry Security of Payment Act (“SOPA”), a “day” is defined as “any day other than a public holiday within the meaning of the Holidays Act (Cap. 126)”. Therefore, under SOPA, a “day“ excludes public holidays, unless the context otherwise requires.
However, parties often find themselves in dispute over whether the definition of a “day” under s. 2 SOPA would apply to their particular contract.
This usually because it is unclear or ambiguous whether the word “day” in the contract could refer to calendar day as well.
In the context of adjudications under SOPA, this can be significant as the difference of a “day“ can mean the difference between a valid and an invalid payment claim, or a payment response, or an adjudication application, as the case may be.
Summary of SKC. And that is exactly what happened in SKC.
SKC turned on whether the “days” in the requirement for the payment response to be provided “within 21 days” under Clause 31(15)(a) of the Articles and Conditions of Building Contract (Lump Sum Contract, 9th Ed) of the Singapore Institute of Architects (the “SIA Conditions”) should include public holidays or exclude public holidays ([5] – [7] SKC).
If it included public holidays, then the Adjudication Application was lodged late, and the Adjudication Determination must be set aside ([8] read with [10] SKC).
Same meaning and effect as SOPA? It was argued that since Article 9 of the SIA Conditions defines a “payment claim” and a “payment response” as having the same meaning and effect as those used in SOPA, it meant that the definition of a “day” in SOPA should be used ([17] SKC).
But this was rejected by the High Court, for the SIA Conditions themselves provide for when a payment response was to be provided ([17] – [19] SKC).
This is relevant because, SIA Conditions aside, such clauses are often found in construction contracts.
What SKC stands for is that such general clauses would not, in and of themselves, mean that the SOPA definition of “day“ is imported into the contract.
How the contract approached “day”. The High Court then examined how the Contract used the word “day”. In this regard, we set out some important points below.
Consistency in usage. The High Court observed that since the “day” in relation to liquidated damages under the Contract includes public holidays, then “consistency of usage” would generally be expected: therefore, the word “day” when it comes to provision of a payment response should also include public holidays ([24] SKC).
For drafters, this is an important (though perhaps trite) point: a word such as “day” would generally be interpreted as having the same usage throughout the contract.
Therefore, if you wish for the “day” in one provision to bear a different meaning from how “day(s)" are used in other provisions, you should make this clear.
Catering for Public Holidays. The High Court then noted that Clause 31(2)(b) of the SIA Conditions caters for what happens if the time for submission falls on a public holiday. The High Court observed that if “day” excludes pubic holidays, then the time for submission could never fall due on a public holiday. This is because such a day would, by definition, have been excluded ([29] - [30] SKC).
This is important to note because we often come across construction contracts where the parties deal with what happens if the day for submission of a payment claim / payment response falls on a non-working day or a public holiday.
Applying the reasoning in SKC, it suggests that for those contracts, the word “day” should be interpreted to mean “calendar day” (though, of course, it is contract dependent).
Wording matters. The High Court also distinguished the earlier decision of UES Holdings Pte Ltd v KH Foges Pte Ltd [2018] 3 SLR 648 (“KH Foges”) where the High Court found that the word “day” should be interpreted in line with the SOPA definition.
As highlighted by the High Court, in KH Foges, there is a clause providing that “the relevant provisions of the SOPA shall apply to this Sub-Contract in respect of payment claim(s), payment response(s) and the date(s) on which progress payment(s) become(s) due and payable” (emphasis added by the High Court).
So, in KH Foges, the parties had acknowledged that the SOPA definition would apply to the dates ([36] SKC).
As such, if your contract has wording similar to those in KH Foges, it is likely that it would be interpreted differently as compared to contracts where the wording is similar to Article 9 of the SIA Conditions.
“Day” under the SIA Conditions. The upshot of the above is that the High Court found that the “drafters of the SIA Conditions chose not to incorporate the SOPA definition of “day”, while incorporating the SOPA definitions of “payment claim” and “payment response”” ([38] SKC).
As such, the High Court found that the Adjudication Application was lodged a day late, and thus set aside the Adjudication Determination.
Be clear about timelines in your contract. SOPA is (in)famous for its draconian timelines. As the High Court made clear in SKC, the difference of a single day can make a huge difference.
It is therefore important for parties to be clear what the word “day” means under the contract. One possible way of doing so is to define “day” clearly in the definitions section.
In general, the word “day” should also be used consistently throughout the contract: either use it consistently as referring to calendar days, or use it consistently as referring to the SOPA definition of “day”.
These are matters which parties should bear in mind when entering into contracts: timelines under SOPA are strict, and the difference of a single “day“ can make a huge difference.
This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.