Builders Hub Pte Ltd v JP Nelson Equipment Pte Ltd [2023] SGHC 120

"The application of the foregoing principle means that the rights of BH which accrued from the valid service of PC 40 prior to the termination event will give rise to an entitlement to a progress payment that remains amenable to adjudication, unless the contract provides otherwise." — Per Teh Hwee Hwee JC, Para 52

Case Information

• Citation: [2023] SGHC 120 (Para 0)
• Court: General Division of the High Court of the Republic of Singapore (Para 0)
• Case Number: Originating Application No 738 of 2022 (Para 0)
• Coram: Teh Hwee Hwee JC (Para 0)
• Date of Judgment: 3 May 2023; hearing dates: 5 and 20 January 2023 (Para 0)
• Counsel for the Applicant: Not answerable from the provided extract (Para 0)
• Counsel for the Respondent: Not answerable from the provided extract (Para 0)
• Area of Law: Construction law; Security of Payment Act; adjudication jurisdiction; contractual termination; natural justice (Paras 27, 34, 73)
• Judgment Length: The provided extract shows the judgment structure and conclusion references, but not the full page count; exact length is not answerable from the extract (Para 0)

Summary

This was an application under the Building and Construction Industry Security of Payment Act 2004 (2020 Rev Ed) to set aside an adjudication determination. The dispute arose after Builders Hub Pte Ltd (“BH”) served Payment Claim 40 before the contract was terminated, and the central question was whether that pre-termination payment claim could still support adjudication after termination. The court held that the decisive inquiry was not a mechanical “default position” based on timing alone, but whether the contract’s termination provisions were actually engaged on the facts. (Paras 27, 28, 32, 35, 52)

The court also addressed a second jurisdictional objection: whether the designated payment certifier was functus officio. It held that this point did not affect the adjudicator’s jurisdiction because JP Nelson Equipment Pte Ltd (“JP”) had served its own payment response, and that response governed the adjudication application under the statutory scheme. The court further rejected the complaint that the adjudicator had breached natural justice, holding that the impugned findings were fairly connected to the parties’ arguments and that BH had a fair and reasonable chance to address them. (Paras 65, 67, 69, 72, 73, 81)

In substance, the judgment clarifies that a validly served payment claim can remain amenable to adjudication even if the contract is later terminated, unless the contract’s termination provisions, properly engaged on the facts, displace that entitlement. It also illustrates the court’s careful distinction between the contractual machinery under REDAS and the statutory adjudication regime under the SOPA, especially where the employer’s payment response supersedes the designated payment certifier’s interim certificate. (Paras 34, 36, 52, 69)

What were the material facts and how did the dispute arise?

On or around 8 June 2018, BH was awarded a contract by JP for the construction of a building in a project, and the contract incorporated the REDAS Design and Build Conditions of Contract (3rd Ed, October 2010). The court noted that the contract also contained the usual payment-certification machinery under the REDAS Conditions, including the role of the Employer’s Representative and the contractor’s entitlement to serve payment claims. (Para 3)

"On or around 8 June 2018, BH was awarded a contract (“Contract”) by JP for the construction of a building in a project (“Project”). The Contract incorporated the REDAS Design and Build Conditions of Contract (3rd Ed, October 2010) (the “REDAS Conditions”)." — Per Teh Hwee Hwee JC, Para 3

On 2 August 2022, JP’s Employer’s Representative issued a notice under cl 30.2.1 of the REDAS Conditions and alleged delay in the works. The notice required BH to recommence the design or construction of the works, or to proceed with due diligence and expedition. The court later treated this notice as part of the factual matrix relevant to whether the termination machinery had actually been engaged. (Paras 4, 28, 32)

"The notice further specifies that it was issued under cl 30.2.1 of the REDAS Conditions, which empowered the Employer’s Representative to give written notice to the contractor requiring him to recommence the design or the construction of the works, or to proceed with due diligence and expedition in the works." — Per Teh Hwee Hwee JC, Para 4

BH served Payment Claim 40 on 18 August 2022 for $2,471,258.29. The chronology then became critical: BH later asserted repudiatory breaches by JP and said it accepted JP’s repudiatory breach on 26 August 2022, while JP purported to terminate BH’s employment later that same day. BH then commenced SOPA adjudication on 22 September 2022 in respect of PC 40, claiming $940,246.97 inclusive of GST. The adjudicator dismissed the application on 27 October 2022 on the basis that PC 40 fell outside the SOPA and that he therefore lacked jurisdiction. (Paras 5, 7, 9, 10)

"On 18 August 2022, BH served Payment Claim 40 (“PC 40”) on JP for the sum of $2,471,258.29." — Per Teh Hwee Hwee JC, Para 5

"On 26 August 2022, BH replied to JP stating that JP had indicated by its conduct that it would continue with its alleged repudiatory conduct and breaches of contract. As a result, BH stated that it was accepting the alleged repudiatory breach of contract by JP." — Per Teh Hwee Hwee JC, Para 7

"On 22 September 2022, BH made an adjudication application (“SOP/AA 164 of 2022”) in respect of PC 40 under s 13(1) of the SOPA, claiming for the sum of $940,246.97, inclusive of Goods and Services Tax." — Per Teh Hwee Hwee JC, Para 9

"On 27 October 2022, the learned Adjudicator released his written adjudication determination (the “Adjudication Determination”) dismissing SOP/AA 164 of 2022 on the basis that PC 40 fell outside the purview of the SOPA and that consequently he had no jurisdiction to adjudicate the proceedings that were commenced on the basis of PC 40." — Per Teh Hwee Hwee JC, Para 10

What issues did the court have to decide?

The court framed three issues for decision: first, whether BH was precluded from applying for adjudication of PC 40 because a contractual termination event occurred before the adjudication application was filed, even though PC 40 had been validly served before termination; second, whether BH was precluded because the designated payment certifier was functus officio; and third, whether the adjudicator breached the rules of natural justice. The court’s framing is important because it shows that the dispute was not merely about timing, but about the interaction between contractual termination machinery, statutory payment rights, and procedural fairness. (Para 27)

"The following issues arise for my decision in this application: (a) whether BH was precluded from applying for adjudication of PC 40 by virtue of a contractual termination event occurring before the relevant adjudication application was filed, even though PC 40 itself was validly served prior to the termination event; (b) whether BH was precluded from applying for adjudication of PC 40 on the basis that the designated payment certifier was functus officio; and (c) whether the learned Adjudicator acted in breach of the rules of natural justice." — Per Teh Hwee Hwee JC, Para 27

On the first issue, the court rejected the adjudicator’s “default position” that a termination event automatically defeated the contractor’s entitlement to adjudication. The court said that the critical point was whether the employment termination clause was engaged in the first place. That meant the analysis had to begin with the contract’s own terms and the factual question of whether the contractual suspension or termination mechanism had actually been triggered. (Paras 28, 32, 35, 36)

"The foremost consideration would be the terms of the Contract (Orion-One at [23], citing Yau Lee at [31] and Shimizu at [2], [21] and [28])." — Per Teh Hwee Hwee JC, Para 28

"With respect, I do not agree with this ‘default position’. The ‘default position’ does not consider the critical point of whether the employment termination clause is engaged in the first place." — Per Teh Hwee Hwee JC, Para 32

On the second issue, the court held that the functus officio argument did not matter on the facts because JP had served its own payment response, PR 40, and that response governed the adjudication application. On the third issue, the court held that the adjudicator had not breached natural justice because the findings were within the scope of the parties’ arguments and the parties had a fair and reasonable chance to be heard. (Paras 65, 67, 69, 72, 73, 81)

How did the court interpret the SOPA and the contract when deciding whether a pre-termination payment claim could still be adjudicated?

The court’s analysis began with the statutory and contractual framework. It emphasised that the “foremost consideration” is the contract’s terms, and it relied on prior authorities to explain that the SOPA operates against, not in disregard of, the parties’ bargain. The court then examined s 4(2)(c) of the SOPA and held that the provision only excludes the Act where the contract contains termination provisions permitting suspension of progress payments and those provisions have actually been engaged on the facts. (Paras 28, 34, 35, 36)

"Section 4(2)(c) of the SOPA reads as follows: Application of Act 4.— … (2) This Act does not apply to — (c) any terminated contract to the extent that — (i) the terminated contract contains provisions relating to termination that permit the respondent to suspend progress payments to the claimant until a date or the occurrence of an event specified in the contract; and (ii) that date has not passed or that event has not occurred;" — Per Teh Hwee Hwee JC, Para 34

The court rejected a broad reading of s 4(2)(c) that would automatically strip a contractor of adjudication rights whenever termination occurred before the adjudication application. Instead, it held that the provision is engaged only if the relevant suspensory contractual mechanism is actually invoked or engaged. In the court’s words, where the suspensory provision is not invoked or engaged on the facts, s 4(2)(c) does not operate to disentitle the contractor to progress payments. That reasoning was central to the court’s conclusion that the timing of termination alone was not determinative. (Paras 35, 36, 52)

"In my view, s 4(2)(c) of the SOPA only applies to exclude the application of the SOPA to a terminated contract if there are terms in that contract ‘relating to termination that permit the respondent to suspend progress payments’ that have been engaged." — Per Teh Hwee Hwee JC, Para 35

"Where the suspensory provision in the contract is not invoked or engaged on the facts, s 4(2)(c) does not operate to disentitle a contractor to progress payments." — Per Teh Hwee Hwee JC, Para 36

Applying that principle, the court found that PC 40 had been validly served while the contract was still on foot, and that BH’s rights accrued from that valid service. Those accrued rights gave rise to an entitlement to a progress payment that remained amenable to adjudication unless the contract provided otherwise. The court therefore treated the contractual and statutory analysis as fact-sensitive rather than automatic, and it rejected the notion that termination after service of the payment claim necessarily extinguished the adjudication route. (Paras 52, 53)

"In the present case, there is no dispute that PC 40 relates to construction work under the Contract. There is also no dispute that BH was entitled to serve PC 40 under cl 22 of the REDAS Conditions, when it was served, and that PC 40 was validly served." — Per Teh Hwee Hwee JC, Para 52

Why did the court say the adjudicator’s “default position” was wrong?

The adjudicator had apparently proceeded on a “default position” that once a termination event occurred, the contractor’s entitlement to adjudication fell away. The High Court rejected that approach because it failed to ask the prior question whether the termination clause was engaged at all. The court’s reasoning was that a contractual termination event does not operate in the abstract; it must be analysed through the actual terms of the contract and the actual facts surrounding the alleged termination. (Paras 28, 32, 35)

"The foremost consideration would be the terms of the Contract (Orion-One at [23], citing Yau Lee at [31] and Shimizu at [2], [21] and [28])." — Per Teh Hwee Hwee JC, Para 28

"With respect, I do not agree with this ‘default position’. The ‘default position’ does not consider the critical point of whether the employment termination clause is engaged in the first place." — Per Teh Hwee Hwee JC, Para 32

The court’s approach was consistent with the authorities it cited, which emphasise that the SOPA does not operate in a contractual vacuum. The court referred to cases such as Orion-One, Yau Lee, and Shimizu to support the proposition that the contract’s terms are the starting point and that the effect of termination depends on the contractual mechanism actually triggered. In this case, the court concluded that the adjudicator’s reasoning was too blunt because it treated termination as automatically dispositive rather than asking whether the relevant contractual suspension or termination provisions had been engaged. (Paras 28, 35, 36)

That distinction mattered because BH’s payment claim had been validly served before the alleged termination event. The court therefore treated the claim as creating accrued rights that could still be pursued through adjudication, unless the contract expressly and effectively displaced that entitlement. The court’s analysis thus preserved the statutory policy of prompt payment while still respecting the contract’s own termination machinery. (Paras 52, 53)

How did the court deal with the functus officio argument about the designated payment certifier?

JP argued that BH could not seek adjudication because the designated payment certifier was functus officio. The court rejected that argument as immaterial on the facts. It reasoned that the employer’s own payment response, PR 40, had been served on 15 September 2022, and that the statutory scheme looks to the payment response in relation to the payment claim. Because JP did not argue that PR 40 was invalid or should be disregarded, the status of the Employer’s Representative did not affect the adjudicator’s jurisdiction. (Paras 20, 65, 67, 69, 72)

"BH asserts that this is irrelevant, because it is the employer himself who was to provide the payment response which takes precedence over any certification by the designated payment certifier." — Per Teh Hwee Hwee JC, Para 20

"Section 11(1) of the SOPA similarly provides that a respondent named in a payment claim served in relation to a construction contract must respond to the payment claim by providing, or causing to be provided, a payment response to the claimant by the timelines stated in that provision." — Per Teh Hwee Hwee JC, Para 67

The court explained that s 12(2) ties the adjudication application to the relevant payment claim, and that the statutory framework contemplates the respondent’s payment response as the operative response to that claim. On that basis, the court held that PR 40 was the relevant document for adjudication purposes. Since JP had not challenged PR 40’s validity, the court concluded that the designated payment certifier’s status could not deprive the adjudicator of jurisdiction. (Paras 66, 67, 69)

"Section 12(2) of the SOPA specifies that any adjudication application made under s 13 would be ‘in relation to the relevant payment claim’." — Per Teh Hwee Hwee JC, Para 66

"However, the status of the Employer’s Representative when it issued this certificate is immaterial because JP served PR 40 on BH on 15 September 2022 (see [8] above)." — Per Teh Hwee Hwee JC, Para 69

The court then drew the practical conclusion that BH was entitled to rely on PR 40 in making its adjudication application under s 13(1) of the SOPA, regardless of whether a valid interim payment certificate had been issued. This was a significant point because it separated the adjudication jurisdiction question from the internal status of the employer’s representative under the contract. The court therefore held that the functus officio argument did not defeat the application. (Paras 69, 72)

"This means that BH is entitled to rely on PR 40 in making its adjudication application under s 13(1) of the SOPA, regardless of whether a valid Interim Payment Certificate had been issued." — Per Teh Hwee Hwee JC, Para 69

"In summary, I find on the facts that whether the Employer’s Representative was functus officio or not does not affect the adjudicator’s jurisdiction to determine SOP/AA 164 of 2022." — Per Teh Hwee Hwee JC, Para 72

Why did the court reject the natural justice challenge?

JP contended that the adjudicator had breached natural justice in reaching the impugned findings. The court rejected that submission. It held that the adjudicator’s conclusions were not reached without giving the parties a fair and reasonable chance to be heard, and that the findings were sufficiently connected to the issues and arguments that had been ventilated. The court therefore found no procedural unfairness in the adjudication process. (Paras 73, 81)

"In my view, the learned Adjudicator did not breach the rules of natural justice in arriving at his decision." — Per Teh Hwee Hwee JC, Para 73

The court’s reasoning was that the impugned findings were not alien to the parties’ case. Rather, they were grounded in the same contractual and statutory issues that the parties had been debating, including the effect of termination, the role of the payment certifier, and the operation of the SOPA. Because the parties had a fair and reasonable chance to address those issues, the court held that the adjudicator’s decision could not be set aside for breach of natural justice. (Paras 73, 81)

"For the foregoing reasons, the learned Adjudicator cannot be said to have reached the two impugned findings without giving the parties a fair and reasonable chance to be heard on those issues." — Per Teh Hwee Hwee JC, Para 81

This aspect of the judgment is important because it shows the court’s reluctance to convert every adverse adjudication outcome into a natural justice complaint. The court required a real denial of the opportunity to be heard, not merely dissatisfaction with the adjudicator’s reasoning or result. On the facts before it, that threshold was not met. (Paras 73, 81)

What statutory provisions did the court rely on, and how did they shape the outcome?

The judgment expressly quoted s 4(2)(c) of the SOPA and discussed ss 11(1), 12(2), 12(3), 13(1), 15(3), and 27(6)(g). The court also referred to Order 36, Rule 3 of the Rules of Court 2021 in the heading of the proceedings. The statutory provisions mattered because the court had to determine whether the Act applied to a terminated contract, whether the adjudication application was properly tied to the relevant payment claim, and whether the respondent’s payment response had been validly served. (Paras 0, 34, 66, 67)

"Section 4(2)(c) of the SOPA reads as follows: Application of Act 4.— … (2) This Act does not apply to — (c) any terminated contract to the extent that — (i) the terminated contract contains provisions relating to termination that permit the respondent to suspend progress payments to the claimant until a date or the occurrence of an event specified in the contract; and (ii) that date has not passed or that event has not occurred;" — Per Teh Hwee Hwee JC, Para 34

The court’s treatment of s 4(2)(c) was especially significant. It did not read the provision as a blanket exclusion for all terminated contracts. Instead, it read the exclusion as conditional: the contract must contain termination provisions permitting suspension of progress payments, and those provisions must be engaged on the facts. That interpretation preserved the statutory policy of interim payment while respecting the parties’ contractual allocation of termination rights. (Paras 35, 36, 52)

Sections 11(1) and 12(2) were also central because they linked the adjudication process to the payment claim and payment response. The court used those provisions to explain why PR 40 mattered and why the employer’s own response could not be ignored. Section 13(1) was the procedural gateway through which BH brought the adjudication application, and the court’s analysis of jurisdiction turned on whether that gateway remained open after termination. (Paras 9, 66, 67, 69)

"Section 12(2) of the SOPA specifies that any adjudication application made under s 13 would be ‘in relation to the relevant payment claim’." — Per Teh Hwee Hwee JC, Para 66

"Section 11(1) of the SOPA similarly provides that a respondent named in a payment claim served in relation to a construction contract must respond to the payment claim by providing, or causing to be provided, a payment response to the claimant by the timelines stated in that provision." — Per Teh Hwee Hwee JC, Para 67

Which authorities did the court refer to, and for what propositions?

The court referred to a number of authorities to support its interpretation of the SOPA and the contractual framework. It cited Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte Ltd, Yau Lee, Shimizu Corp v Stargood Construction Pte Ltd, and Orion-One Residential Pte Ltd v Dong Cheng Construction Pte Ltd to support the proposition that the contract’s terms are the foremost consideration and that termination does not automatically extinguish payment rights. It also referred to CEQ v CER to explain the REDAS certification regime. (Paras 28, 52, 65)

For the proposition that a pre-termination payment claim can survive termination, the court relied on Choi Peng Kum and another v Tan Poh Eng Construction Pte Ltd, LW Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd, and Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd. These authorities were used to show that accrued rights ordinarily survive termination and that the Act can continue to operate in relation to work already done. (Paras 52, 53)

On natural justice, the court referred to Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte Ltd and TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd. Those authorities were used to support the proposition that a decision-maker breaches natural justice only where a party is denied a fair opportunity to address the point, whereas a premise reasonably connected to the parties’ arguments does not amount to unfairness. The court also referred to Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd on waiver and jurisdictional objections under the SOPA. (Paras 73, 81)

What was the practical effect of the court’s decision on the adjudication application?

The practical effect was that the court rejected the jurisdictional objections and held that the adjudication application could proceed on the merits. The court’s reasoning meant that BH’s validly served payment claim remained capable of supporting adjudication despite the later termination event, because the contract’s suspensory provisions were not shown to have been engaged in a way that displaced the statutory entitlement. The court also held that the designated payment certifier issue did not matter and that there was no natural justice breach. (Paras 52, 69, 72, 73, 81)

"The application of the foregoing principle means that the rights of BH which accrued from the valid service of PC 40 prior to the termination event will give rise to an entitlement to a progress payment that remains amenable to adjudication, unless the contract provides otherwise." — Per Teh Hwee Hwee JC, Para 52

That conclusion is practically important for construction disputes because it prevents respondents from using termination as an automatic shield against adjudication where the payment claim was already validly served. It also underscores that the statutory adjudication process is tied to the payment claim and payment response, not merely to the internal status of the employer’s representative. In short, the court preserved the contractor’s access to the SOPA process on the facts before it. (Paras 66, 67, 69)

The judgment therefore serves as a reminder that parties must analyse both the contract and the statute carefully before asserting that termination has extinguished adjudication rights. A respondent seeking to rely on s 4(2)(c) must show not only that the contract has been terminated, but also that the relevant termination provisions permitting suspension of progress payments have been engaged. Without that showing, the contractor’s accrued rights may remain enforceable through adjudication. (Paras 35, 36, 52)

Why does this case matter?

This case matters because it clarifies the relationship between termination and adjudication under the SOPA. It rejects a simplistic rule that termination automatically defeats a pre-termination payment claim and instead requires a close examination of the contract’s termination machinery and the factual circumstances in which it was invoked. That approach is highly relevant to construction practitioners dealing with payment claims issued shortly before termination. (Paras 28, 32, 35, 36, 52)

The case also matters because it distinguishes between the employer’s internal certification process and the statutory payment response regime. By holding that the employer’s payment response could supersede the status of the designated payment certifier, the court reinforced the autonomy of the SOPA framework and reduced the scope for technical objections based on the certifier’s status alone. That has practical significance for employers, contractors, and adjudicators alike. (Paras 65, 67, 69, 72)

Finally, the judgment is important on natural justice. It shows that a party challenging an adjudication determination must identify a real denial of the opportunity to be heard, not merely disagree with the adjudicator’s reasoning. The court’s approach supports the finality and speed of the adjudication process while still preserving procedural fairness. (Paras 73, 81)

Cases Referred To

Legislation Referenced

• Building and Construction Industry Security of Payment Act 2004 (2020 Rev Ed): ss 4(2)(c), 5, 11(1), 12(2), 12(3), 13(1), 15(3), 27(6)(g) (Paras 34, 66, 67)
• Rules of Court 2021: Order 36, Rule 3 (Para 0)

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN

This article analyses [2023] SGHC 120 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.