IMPORTANCE OF SPECIFICATIONS AND CONCURRENT DELAYS
This week’s blog covers ICOP Construction (SG) Pte Ltd v Tiong Seng Civil engineering (Pte) Ltd [2024] SGHC(A) 1, a case from the Appellate Division of the High Court (the “Court”) which discusses a variety of issues relating to construction disputes.
Facts. Around June 2016, Tiong Seng Contractors Pte Ltd (“TSC”) was engaged by the Public Utilities Board to construct a potable water pipeline (the “Project”) ([4]).
TSC subcontracted the project wholly to Tiong Seng Civil Engineering Pte Ltd (“TSCE”), the defendant, who in turn entered into a subcontract with the plaintiff, ICOP Construction (SG) Pte Ltd (“ICOP”), for the performance of microtunelling works ([4] – [5]).
ICOP’s scope of work was to install “124m of DN1200mm Reinforced Concrete Composite Pipe with built in Mild Steel Collar” and “2229m of DN1600mm” of the same type of pipe but of a larger diameter (collectively, the “Subcontract Works”) ([6]).
The installation method was to be by microtunelling. Microtunnelling is a method of installing pipelines which entails thrusting pipes through the ground as controlled excavation is undertaken at the cutter-face of the microtunnel boring machine (“MTBM”) ([6] – [7]).
The appeal. Disputes arose between the parties, resulting in the commencement of litigation.
And this decision concerns the appeal from the trial judge’s decision, where the Court had to address 13 separate issues ([12]).
Given the variety of issues canvassed on appeal, we will not address all of them. Instead, this short blog will just address two issues.
“wall to wall”. One of the issues was what does the specification of “ID 7.5mm (min wall to wall)” mean.
This issue arose because, in short, one of the shafts was constructed with an internal diameter of at least 7.5m ([56]).
However, there was a protruding pipe cap and end valve in this shaft, which, according to ICOP, reduced the working space to below 7.5m ([56]).
This led to issues with the extraction of the MTBM, and ICOP sought to claim for loss and damage ([67]).
A key argument by ICOP was that TSCE was not only obliged to construct a shaft with minimum internal diameter of 7.5m, but that TSCE was also obliged to ensure that the shaft had a “minimum internal working space of 7.5m and free from protruding objects” ([67] – [68], [73]).
This was denied by TSCE, who said that the specification was clear, and that “… the figure of 7.5m was based on the Method Statement prepared by ICOP and that ICOP failed to specify a wider diameter for Shaft P5-1 or specify a wider angular approach for the MTBM such that it would avoid the protruding pipe cap” ([68] – [69]).
The Appellate Division of the High Court upheld the trial judge’s finding that as a question of contractual interpretation, the term “internal diameter” would pertain solely to the physical internal dimensions of the shaft. As set out in [76] which we excerpt below:
“… the term “internal diameter” pertains only to the physical dimensions of Shaft P5-1. It cannot be interpreted to impose on TSCE the additional obligation to ensure that ICOP has 7.5m of “working space” within Shaft P5-1. The concept of “working space” goes beyond the physical dimensions of Shaft P5-1 and will depend on various factors, including the nature of the operation, the size of the machinery and even the number of workers within the shaft at any material time. Requiring TSCE to guarantee a “working space” of 7.5m will mean that TSCE is expected to foresee all these factors and construct Shaft P5-1 with an internal diameter that is wider than 7.5m, which goes against the plain reading of the contractual requirement. Similarly, the term “internal diameter of 7.5m” also cannot be interpreted to mean “free from protruding objects”. The presence of protruding objects within the shaft does not change the internal diameter of the shaft, or the “wall to wall” distance within the shaft.”
As to ICOP’s argument that a term could be implied, the Appellate Division agreed with the trial judge that ICOP could not show any “true gap” in the contract that had to be filled in by any implied term, or that any such term was necessary “for the business efficacy of the contract or that the parties would have definitely agreed to the inclusion of such terms if asked by an officious bystander at the time they concluded the contract” ([77]).
Further, the Appellate Division found that ICOP also failed to adduce any evidence to show that there was any industry standards showing that the term “wall to wall internal diameter” would be interpreted as “free from protruding objects” ([77]).
Pay attention to specification. So, pay attention to your specifications.
It may (at first blush) seem that the presence of protruding objects in the shaft has led to the internal diameter of the shaft being less than 7.5m.
However, given the brevity of the Appellate Division’s decision on this, this argument clearly did not find traction.
Of course, it may be queried to what extent was this the result of ICOP’s pleading.
Nonetheless, contractors would do well to pay attention to your specifications.
It may be prudent not to assume that your understanding of a certain specification matches what has been set out in the contract, unless the specification is very clear or the specification has been defined in the contract.
This is likely to be of particular importance to specialist contractors. If you want, e.g., as in ICOP’s case, for the main contractor to construct something for you (the specialist contractor), ask “Do the specifications make clear what I need from the main contractor?”
Concurrent delay. The Court also addressed concurrent delay in the judgment. At [100], the Court said the following:
“100 Secondly, although the parties spent a great portion of their submissions arguing between the “first-in-time approach” in Saga Cruises and the Malmaison approach, we are of the view that this debate is irrelevant in the present case – it is meaningless to speak of concurrent causes to a delay when the delay in question is not on the critical path. As the learned author in Keating on Construction Contracts (Stephen Furst & Sir Vivian Ramsey gen eds) (Sweet & Maxwell, 11th Ed, 2021) (“Keating”) puts it: “there is only true concurrency in this sense where both events cause delay to the progress of the works and the delaying effect of the two events is felt at the same time and each is critical to completion” (at para 8-026) [emphasis added]. Therefore, the debate on the proper approach to concurrent delays is only relevant where both events causing delay are “of approximately equal causative potency” and both events must, in fact, cause critical delays (ie, they must both affect the critical path of the project).” (emphasis in original)
While concurrent delay is a topic that often (and rightly) attracts a lot of attention, as the Court noted, it is important to bear in mind that this hotly debated topic is irrelevant unless the concurrent delays are in fact on the critical path.
Delaying effect. We also note that Court used the term “delaying effect”.
The term “delaying effect” is important because, as pointed out in the Society of Construction Law Delay and Disruption Protocol (2nd Ed.) (“SCL Protocol”) at [10.3] and [10.4], a “concurrent delay” may refer to a situation where the delay events occur at the same time with the effects being felt at the same time, as well as a situation where the delay events arose at different times, but with the effects being felt at the same time.
In Keating on Construction Contracts (Stephen Furst & Sir Vivian Ramsey gen eds) (Sweet & Maxwell, 11th Ed, 2021) (“Keating”) at [8-026] (the passage referred to by the Court), the learned authors of Keating referred to the SCL Protocol as avoiding the potentially vexing question of what amounts to “causative potency” by adopting the definition of true concurrency as only arising “where both events cause delay to the progress of the works and the delaying effect of the two events is felt at the same time and each is critical to completion”.
The learned authors of Keating at [8-026] had earlier defined concurrent delay as being “a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency”, a definition taken from [277] of Justice Hamblen’s judgment in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) (“Adyard Abu Dhabi”). And in Adyard Abu Dhabi at [279], Justice Hamblen stated that “… there is only concurrency if both events in fact cause delay to the progress of the works and the delaying effect of the two events is felt at the same time”
So, while the Court at [100] stated that “… the debate on the proper approach to concurrent delays is only relevant where both events causing delay are “of approximately equal causative potency” and both events must, in fact, cause critical delays (ie, they must both affect the critical path of the project)”, practically, the debate over “causative potency” can usually take a back seat as the preliminary question to ask is whether there was, in fact, a delaying effect that is being felt at the same time.
If there is no such delaying effect, then the question of concurrent delay simply does not arise.
Conclusion. We round off by noting that the Court at [45] and [215] stated that “parties in technical disputes such as the present case should be held closely to their pleadings”.
In particular, the Court agreed with the following caution given by the trial judge:
“… on technical disputes such as this, parties ought to be bound more strictly to their pleaded cases unless they are able to provide a satisfactory explanation for their omission. Cases of this sort tend to give rise to numerous intertwined and difficult issues, and it is not for an opponent and especially not the court to piece together unpleaded points in search of the best possible case a party may advance …”
Given that certain construction disputes can be very technical, this caution by the Court is important to note.
An example of the stark effect of this is set out in [215]:
“215 We agree with the Judge’s reasoning on this point. As stated earlier (at [45]), parties in technical disputes such as the present case should be held closely to their pleadings. Since ICOP had chosen to adopt an itemised treatment of each head of delay, it must ensure that the delay caused by each pleaded delay event adds up to the total days of delay it claims against TSCE. By attributing the 158 working days of delay exclusively to the worksite readiness and handover issue, the Authorities’ Approvals issue, the headwall issue, and the noise restriction issue, ICOP left no room for the Four Delay Events. The logical inference from ICOP’s pleading is that no days of delay resulted from the Four Delay Events.”
So, it is important not to rush into litigation for complex technical construction disputes.
If you rush into litigation, only to later find out that your case ought to be brought on a different basis due to evidence that was not unearthed earlier (but could have been unearthed had the litigation not been rushed into), you may find yourself not being allowed to reframe your pleaded case, which may have severe ramifications.
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.