WHEN DOES YOUR ENTITLEMENT TO MAKE AN ADJUDICATION APPLICATION ARISE?
The timelines under the Building and Construction Industry Security of Payment Act 2004 are strict. And in the recent High Court case of H P Construction & Engineering Pte Ltd v Mega Team Engineering Pte Ltd [2023] SGHC 298, the High Court dealt with how to calculate the time for when the claimant’s entitlement to make an adjudication application arises.
Background. The key statutory provision is s. 13(3)(a) of the Building and Construction Industry Security of Payment Act 2004 (“SOPA”). It says as follows:
“(3) An adjudication application –
(a) must be made within 7 days after the entitlement of the claimant to make an adjudication application first arises under section 12;”
At first blush, this seems obvious.
If, say, the contract in question is a construction contract, and the dispute settlement period ends on Monday, 23 October 23, then the claimant is entitled to make an adjudication application between 24 – 30 October 23. In other words, you exclude 23 October 2023 from the seven-day period under s. 13(3)(a) SOPA.
But is this correct?
The facts. That is the heart of the dispute in H P Construction & Engineering Pte Ltd v Mega Team Engineering Pte Ltd [2023] SGHC 298 (“HP v Mega”).
The claimant, H P Construction & Engineering Pte Ltd (“HP”), applied to set aside an adjudication determination made under SOPA in favour of the defendant, Mega Team Engineering Pte Ltd (“Mega”), on the basis that Mega had lodged its adjudication application one day late.
Both HP and Mega agreed that the dispute settlement period ended on 27 June 2023 (HP v Mega [5]). And it is undisputed that Mega lodged its adjudication application on 6 July 2023.
Putting aside 29 June 2023, which is a public holiday (HP v Mega [6]), there are two possible interpretations:
HP’s Interpretation. Mega’s entitlement to make an adjudication application ends on 5 July 2023. This means that 28 June 2023 is counted as part of the 7 days under s. 13(3)(a) SOPA (HP v Mega [6]).
Mega’s Interpretation. Mega’s entitlement to make an adjudication application ends on 6 July 2023. This means that 28 June 2023 is not counted as part of the 7 days under s. 13(3)(a) SOPA (HP v Mega [9]).
HP’s Interpretation. To support its interpretation, HP argued that Mega’s right to make an adjudication application arose on 28 June 2023, and the seven-day period under s. 13(3)(a) SOPA starts from 28 June 2023 at 0000hrs and ends by 5 July 2023 at 2359hrs (HP v Mega [6]).
HP also relied on a guide on application timelines under SOPA provided by the Building and Construction Authority (“BCA”) as well as a checklist issued by the Singapore Mediation Centre (“SMC”) (HP v Mega [8]), both of which include the day on which the entitlement arose as part of the seven-day period under s. 13(3)(a) SOPA.
Mega’s Interpretation. In contrast, Mega argued that the seven-day entitlement only commences “the day after entitlement arises, and does not include the day on which it does so”, and relied upon s 50(a) of the Interpretation Act 1965 which provides that when computing time, 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” (HP v Mega [9]).
Mega also relied on the case of YTL Construction (S) Pte Ltd v Balanced Engineering & Construction Pte Ltd [2014] SGHC 142 (“YTL Construction”), though as noted by Justice Philip Jeyaretnam, there was no indication that this point was argued before Justice Tan Siong Thye in YTL Construction.
What did the High Court find? Justice Jeyaretnam held for Mega’s Interpretation for the following reasons:
The SOPA regime operates in days, and thus the entitlement arises on the day, and not at any particular time of the day (HP v Mega [14]).
Further, as a question of ordinary language, the phrase “must be made within 7 days after the entitlement of the claimant to make an adjudication application first arises under section 12” leads to the conclusion that “seven-day period after the entitlement arises will commence on the day after“ (HP v Mega [14]; emphasis in original).
This interpretation is also supported by the common law and s. 50(a) of the Interpretation Act 1965, both of which (in summary) provided that the “day of the event was excluded from the computation of the period within which a person must act upon that event” (HP v Mega [15] – [16]).
The BCA’s infographics and SMC’s checklist referred to by HP do not accurately reflect the correct position, and also contained different errors.
As a result, Mega’s adjudication application, being lodged on 6 July 2023, was lodged on time.
Conclusion. While HP v Mega clarified how to calculate the time for the making of an adjudication application, it also shows how the timelines under SOPA can create issues even though the act has been in force for so many years.
As Justice Jeyaretnam re-iterated at HP v Mega [1], the SOPA regime “operates in accordance with strict timelines and time periods.”
Hence, if you face any issues over how to determine the timelines, it is best to be prudent and to review your contracts carefully, and if necessary, seek legal advice on the same.
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.