ZHONG KAI CONSTRUCTION COMPANY PTE. LTD. v DIAMOND GLASS ENTERPRISE PTE. LTD.

"As explained above, it is the completion date in cl 6 that is applicable to the calculation of LD. The calculations for LD for Phase 1 should therefore start after 16 March 2018." — Per Kwek Mean Luck JC, Para 52

Case Information

• Citation: [2021] SGHC 277 (Para 0)
• Court: In the General Division of the High Court of the Republic of Singapore (Para 0)
• Date of Judgment: 02 December 2021 (Para 0)
• Coram: Kwek Mean Luck JC (Para 0)
• Case Number: Suit No 1282 of 2019 (Para 0)
• Area of Law: Building and Construction Law; Damages; Liquidated Damages (Para 0)
• Counsel for the Plaintiff: Not answerable from the supplied extraction (Para 0)
• Counsel for the Defendant: Not answerable from the supplied extraction (Para 0)
• Judgment Length: Not answerable from the supplied extraction (Para 0)

Summary

This was a construction dispute arising out of a subcontract for aluminium cladding, blast/ballistic doors and windows, aluminium doors, and window works for a project at Changi Airport. The plaintiff sued for liquidated damages, replacement works, and rectification works, while the defendant advanced counterclaims for variation orders, retention, the balance of the subcontract sum, and legal costs associated with the adjudication. The court’s central task was to determine which contractual dates governed liquidated damages, whether any delay should be excused or reduced, and whether the liquidated damages clause was enforceable as a genuine pre-estimate or struck down as a penalty. (Para 3) (Para 4) (Para 34)

The court held that the completion dates in cl 6, not cl 4, governed the liquidated damages calculation. On that basis, the plaintiff was entitled to liquidated damages only for Phase 1, and not for Phase 2A. The court further held that the defendant had wrongfully terminated the subcontract, and it rejected the defendant’s attempt to justify its non-performance by pointing to alleged payment delays and alleged acts of prevention by the plaintiff. (Para 41) (Para 52) (Para 53) (Para 77)

The judgment also resolved a number of subsidiary disputes concerning glass specifications, responsibility for submissions to the Building and Construction Authority, the significance of the defendant’s abandonment of the worksite, and the evidential basis for the plaintiff’s claims for replacement and rectification costs. The court relied heavily on documentary correspondence and witness testimony, and it assessed the parties’ competing narratives against the contractual text and the chronology of performance. In the result, the plaintiff succeeded in part, the defendant succeeded only in part on one variation order, and the court set aside three variation orders that had been the subject of the adjudication determination. (Para 5) (Para 72) (Para 80) (Para 89)

What Was the Subcontract and How Did the Dispute Arise?

The dispute began with a subcontract dated 7 November 2016 under which the plaintiff engaged the defendant to supply materials, equipment, and tools and to carry out and complete the aluminium cladding of the external facade, blast/ballistic doors and windows, aluminium doors, and window works for the project. The subcontract was not a single undifferentiated scope; it was divided into Phase 1 and Phase 2A, and that division later became central to the parties’ arguments about delay, completion, and liquidated damages. (Para 3) (Para 6)

"By a letter dated 7 November 2016 (the “Subcontract”), the plaintiff engaged the defendant as a subcontractor for the supply of materials, equipment and tools to carry out and complete the aluminium cladding of the external facade, blast/ballistic doors and windows, aluminium doors, and window works for the Project." — Per Kwek Mean Luck JC, Para 3

The plaintiff’s pleaded case was that the defendant had delayed performance, abandoned the worksite around 6 June 2018, and left the plaintiff to procure replacement works and rectification works from third parties. The defendant, by contrast, maintained that the plaintiff’s own conduct, including alleged non-payment and alleged failure to give clear instructions, caused the delay and justified the defendant’s termination of the subcontract. The court therefore had to examine not only the contractual machinery for liquidated damages, but also the factual sequence leading to the breakdown of the relationship. (Para 4) (Para 14) (Para 15) (Para 33)

"In this suit, the plaintiff claims against the defendant for Liquidated Damages (“LD”) arising from the defendant’s delays, for replacement works arising from the defendant’s abandonment of the worksite around 6 June 2018 and for rectification works done." — Per Kwek Mean Luck JC, Para 4

The judgment also records that the plaintiff’s claims were not limited to liquidated damages. The plaintiff sought to recover the costs of replacement works and rectification works, and it also challenged aspects of the adjudication determination, including three variation orders. The defendant, in turn, pursued its own claims for variation orders, retention, the balance of the subcontract sum, and legal costs associated with the adjudication. The case therefore presented a multi-layered construction dispute in which contractual interpretation, factual causation, and proof of loss all mattered. (Para 4) (Para 5)

How Did the Court Frame the Liquidated Damages Issues?

The court identified three main issues under the liquidated damages claim. First, it asked whether the completion dates in cl 4 or cl 6 of the subcontract applied for the purposes of the liquidated damages clause. Second, it asked whether there were justifiable reasons for reducing the period of delay. Third, it asked whether the liquidated damages quantum in cl 6 was a penalty. Those questions framed the entire analysis of the LD claim and determined the structure of the court’s reasoning. (Para 34)

"There are three main issues arising under this claim:" — Per Kwek Mean Luck JC, Para 34

The plaintiff’s position was that the dates in cl 6 were not the operative dates for determining when liquidated damages began to run, and that the applicable dates were instead found in cl 4. The defendant’s position was the opposite: it said that the completion dates for Phase 1 and Phase 2A were 16 March 2018 and 29 December 2017 respectively, as derived from cl 6 rather than cl 4, and that cl 6 was not a liquidated damages clause at all but a penalty clause and therefore unenforceable. The court’s task was therefore to interpret the contract as a whole and decide which clause governed the LD machinery. (Para 33) (Para 37)

"The plaintiff, however, submits that the dates in cl 6 are not applicable in determining when the assessment of LD starts. Instead, the applicable dates for the imposition of the LD rates set out in cl 6, are found in cl 4" — Per Kwek Mean Luck JC, Para 37

On the interpretation question, the court held that a plain reading of cl 6 and cl 4 indicated that the relevant dates for assessing liquidated damages were those found in cl 6, rather than those in cl 4. The court also rejected the defendant’s attempt to treat cl 6 as a penalty clause. The judgment’s reasoning was anchored in the contractual text and the way the subcontract allocated completion dates and LD rates. (Para 41) (Para 43)

"A plain reading of cl 6 and cl 4, indicates that the relevant dates for assessing LD are those found in cl 6, rather than those in cl 4." — Per Kwek Mean Luck JC, Para 41

The court also addressed the contra proferentem argument. It noted that mere difficulty in interpretation does not immediately trigger the rule; rather, the contract must contain ambiguity that cannot be resolved by applying an interpretation that fits the context of the contract. That principle mattered because the defendant sought to use interpretive uncertainty to undermine the plaintiff’s LD claim, but the court found the contractual language sufficiently clear when read in context. (Para 43)

"Mere difficulty in interpretation, without more, does not immediately trigger the application of the contra proferentem rule." — Per Kwek Mean Luck JC, Para 43

Why Did the Court Hold That Clause 6, Not Clause 4, Governed Liquidated Damages?

The court’s conclusion on the governing clause turned on the structure of the subcontract and the wording used in the relevant provisions. The plaintiff argued that the dates in cl 4 were the operative completion dates for LD, while the defendant argued that the dates in cl 6 were the relevant dates. The court preferred the defendant’s reading on this point, but only insofar as it meant that cl 6 supplied the completion dates for the LD calculation; the defendant did not succeed in turning that interpretive point into a complete defence, because the court still found the plaintiff entitled to LD for Phase 1. (Para 33) (Para 41) (Para 52)

The court’s reasoning was not merely formalistic. It examined the contractual text and concluded that the dates in cl 6 were the dates that mattered for the assessment of LD. That meant the LD clock for Phase 1 began after 16 March 2018. The court then applied the actual completion date it accepted on the evidence, namely 30 September 2018, and calculated the delay period accordingly. The result was a quantified award of liquidated damages for Phase 1 only. (Para 41) (Para 51) (Para 52)

"I accept Ms Chai’s testimony that 30 September 2018 was used as the completion date as that was the last date for the mobile crane work for the glass installation." — Per Kwek Mean Luck JC, Para 51

The court then translated that factual finding into a damages calculation. Taking 30 September 2018 as the completion date for Phase 1, the court found 198 days of delay after 16 March 2018. At the contractual rate of $1,800 per day, the plaintiff was entitled to $356,400 in liquidated damages for Phase 1. The court expressly summarised the result by stating that the plaintiff was not entitled to LD for Phase 2A, but was entitled to LD of $356,400 for Phase 1. (Para 52) (Para 53)

"Taking the actual completion date for Phase 1 of 30 September 2018, this would be 198 days of delay. As the LD quantum for Phase 1 under cl 6 is at $1,800 per day, the total LD that the plaintiff would be entitled to for Phase 1 would be $356,400." — Per Kwek Mean Luck JC, Para 52

"In summary, the plaintiff is not entitled to LD for Phase 2A. The plaintiff is entitled to LD of $356,400 for Phase 1." — Per Kwek Mean Luck JC, Para 53

Why Was the Plaintiff Denied Liquidated Damages for Phase 2A?

The court’s refusal to award liquidated damages for Phase 2A was tied to the evidential and contractual position on that phase. The judgment states in summary terms that the plaintiff was not entitled to LD for Phase 2A, and later explains that the plaintiff was not entitled to any damages for alleged delays caused by the defendant for Phase 2A works. The court’s treatment of Phase 2A therefore reflects both a contractual interpretation and a failure of proof on the plaintiff’s part. (Para 53) (Para 60)

"The plaintiff is therefore not entitled to any damages for alleged delays caused by the defendant for Phase 2A works." — Per Kwek Mean Luck JC, Para 60

The judgment does not support a broader proposition that Phase 2A could never attract damages in principle; rather, on the facts and evidence before the court, the plaintiff did not establish an entitlement to recover LD or other damages for that phase. The court’s conclusion was therefore fact-sensitive and tied to the way the subcontract and the evidence interacted. The result was that the plaintiff’s recovery was confined to Phase 1 liquidated damages. (Para 53) (Para 60)

That distinction mattered because the subcontract was divided into two phases, and the parties’ arguments about delay, completion, and responsibility for non-performance were not identical across both phases. The court’s analysis shows that a claimant seeking LD must prove not only the contractual basis for the claim, but also the factual completion date and the causal link between delay and the contractual entitlement. On this record, the plaintiff succeeded only in part. (Para 6) (Para 51) (Para 52) (Para 60)

What Did the Court Decide About Delay, Repudiation, and the Defendant’s Termination?

The defendant argued that the plaintiff’s non-payment and other conduct justified the defendant’s repudiation of the subcontract. The court rejected that case. It relied on the principle that not every instance of non-payment amounts to repudiation, and that only a persistent course of payment delays or a protracted delay in the payment of a very substantial sum may amount to repudiation. Applying that principle, the court found that the defendant had not shown a persistent course of payment delays sufficient to justify its termination. (Para 63) (Para 77)

"There may be instances in which a persistent course of payment delays, or a protracted delay in the payment of a very substantial sum amounts to a repudiation of the contract" — Per Kwek Mean Luck JC, Para 63

"not every instance of non-payment by a contracting party will suffice to constitute repudiation." — Per Kwek Mean Luck JC, Para 63

The court’s conclusion was explicit: it found that the defendant, not the plaintiff, wrongfully terminated the subcontract. That finding was important because it undercut the defendant’s attempt to justify its abandonment of the worksite and its later termination letter. The court’s reasoning shows that the defendant’s repudiation argument failed both as a matter of principle and on the evidence. (Para 77)

"Accordingly, I find that it is the defendant that wrongfully terminated the Subcontract." — Per Kwek Mean Luck JC, Para 77

The court also addressed the defendant’s reliance on alleged acts of prevention. The defendant submitted that the plaintiff and SCB committed acts of prevention that prevented the defendant from completing the works on time, citing Lian Soon Construction Pte Ltd Guan Qian Realty Pte Ltd. The court did not accept that submission on the evidence before it. Instead, it found that the defendant had not shown that the plaintiff’s conduct justified the defendant’s delay or termination. (Para 78) (Para 85) (Para 86)

"The defendant also submits that SCB and the plaintiff committed “acts of prevention” which prevented the defendant from completing the works on time: Lian Soon Construction Pte Ltd Guan Qian Realty Pte Ltd [1999] 3 SLR(R) 518 at [18]." — Per Kwek Mean Luck JC, Para 78

How Did the Court Deal With the Glass Specification and Submission Disputes?

A substantial part of the factual dispute concerned glass specifications and responsibility for submissions to the Building and Construction Authority. The court found, from the documentary evidence, that the defendant recommended Saint-Gobain glass in September 2017. It also found clear correspondence from SCB to the defendant on 27 December 2016 stating that the defendant was to make the “ST submission” to BCA by December 2016. These findings were relevant because they undermined the defendant’s attempt to shift responsibility for delay onto the plaintiff. (Para 80) (Para 89)

"From the documentary evidence, the defendant recommended Saint-Gobain glass in September 2017." — Per Kwek Mean Luck JC, Para 80

"There is clear correspondence from SCB to the defendant on 27 December 2016 that the defendant was to make the “ST submission” to BCA by December 2016." — Per Kwek Mean Luck JC, Para 89

The court’s treatment of these issues shows the importance of contemporaneous documents in construction disputes. The defendant’s own recommendation of Saint-Gobain glass and the correspondence assigning submission responsibility were inconsistent with a narrative that the plaintiff alone caused the delay. The court therefore used the documentary record to test the credibility of the parties’ competing explanations for the project’s slippage. (Para 80) (Para 89)

These findings also fed into the broader causation analysis. If the defendant itself recommended the glass solution and was responsible for the submission process, then the defendant could not easily attribute the delay to the plaintiff’s conduct. The court’s reasoning on these points was therefore not isolated; it formed part of the chain of reasoning that led to the rejection of the defendant’s repudiation case and the acceptance of the plaintiff’s LD claim for Phase 1. (Para 80) (Para 85) (Para 89)

What Evidence Did the Court Rely On to Find That the Defendant Abandoned the Site and Left Work Outstanding?

The court relied on witness testimony and documentary evidence to establish the state of the works when the defendant left the site. One important factual finding was that Mr Rajeesh admitted on the stand that the installation of the 13 pieces of cabin glass was outstanding when the defendant abandoned the works on 5 June 2018. That admission supported the plaintiff’s case that the defendant had not completed its obligations before walking away from the project. (Para 72)

"Mr Rajeesh also admitted on the stand that the installation of the 13 pieces of cabin glass was outstanding when the defendant abandoned works on 5 June 2018." — Per Kwek Mean Luck JC, Para 72

The court also found that on 6 June 2018 the defendant abandoned the work site. Shortly thereafter, on 29 June 2018, the defendant sent a letter by email stating that it had “no choice but to accept [the plaintiff’s] repudiatory breach and terminate the contract.” The court did not accept that characterization of events. Instead, it treated the defendant’s abandonment and purported termination as wrongful. (Para 14) (Para 15) (Para 77)

"On 6 June 2018, the defendant abandoned the work site." — Per Kwek Mean Luck JC, Para 14

"On 29 June 2018, the defendant sent a letter to the plaintiff via email stating that it had “no choice but to accept [the plaintiff’s] repudiatory breach and terminate the contract”" — Per Kwek Mean Luck JC, Para 15

The court’s acceptance of the plaintiff’s evidence on completion date and outstanding work was critical to the LD calculation. It accepted Ms Chai’s testimony that 30 September 2018 was used as the completion date because that was the last date for the mobile crane work for the glass installation. That factual finding anchored the 198-day delay calculation and the resulting award of $356,400. (Para 51) (Para 52)

How Did the Court Approach the Defendant’s Argument That Clause 6 Was a Penalty?

The defendant argued that cl 6 was not a liquidated damages clause but a penalty clause and therefore unenforceable. The court did not accept that submission. While the supplied extraction does not reproduce a lengthy standalone penalty analysis, the court’s ultimate treatment of cl 6 as the operative LD clause, and its award of LD under that clause, necessarily rejected the defendant’s penalty argument. The court’s reasoning proceeded from the contractual text and the structure of the subcontract rather than from any abstract presumption. (Para 33) (Para 41) (Para 52)

"Clause 6 is not a LD clause but a penalty clause and hence unenforceable." — Per Kwek Mean Luck JC, Para 33

The court’s approach was to read cl 6 and cl 4 together and determine which dates and rates were intended to govern the LD regime. Having concluded that cl 6 supplied the relevant dates for assessing LD, the court then applied the contractual rate to the proven delay period. That is inconsistent with the defendant’s contention that the clause was unenforceable as a penalty. The court’s award therefore reflects a finding that the clause operated as a valid liquidated damages provision on the facts before it. (Para 41) (Para 52) (Para 53)

In practical terms, the defendant’s penalty argument failed because the court found a coherent contractual mechanism for LD and a factual basis for applying it. The court did not need to recast the clause or invent a different damages framework; it simply applied the clause as written, after resolving the interpretive dispute in the plaintiff’s favour on the operative dates. (Para 41) (Para 52)

What Happened to the Plaintiff’s Claims for Replacement and Rectification Works?

The plaintiff’s case was not confined to liquidated damages. It also sought replacement works arising from the defendant’s abandonment of the worksite and rectification works done. The court’s summary states that it allowed the plaintiff’s claims for LD and the costs of replacement and rectification works in part. The supplied extraction does not set out every item of those claims in detail, but it is clear that the court accepted at least part of the plaintiff’s case on these heads of loss. (Para 4) (Para 5)

"I allowed the plaintiff’s claims for LD and the costs of replacement and rectification works in part and set aside three of the VOs that were the subject of the adjudication determination." — Per Kwek Mean Luck JC, Para 5

The judgment also indicates that the plaintiff’s entitlement to damages for Phase 2A was rejected. That means the court distinguished between the plaintiff’s successful recovery for certain replacement and rectification items and its unsuccessful attempt to recover damages for alleged Phase 2A delay. The court’s treatment of these claims was therefore granular rather than global. (Para 5) (Para 60)

Because the supplied extraction does not provide the full item-by-item breakdown of the replacement and rectification claims, it would be unsafe to go beyond the court’s stated outcome. What can be said with confidence is that the court accepted part of the plaintiff’s loss case, rejected part of it, and tied the result to the evidence and the contractual framework. (Para 5) (Para 60)

How Did the Court Resolve the Defendant’s Counterclaims for Variation Orders and Legal Costs?

The defendant advanced counterclaims that included variation orders, retention, the balance of the subcontract sum, and legal costs associated with the adjudication. The court’s summary states that it allowed one of the defendant’s claims for a variation order and dismissed the defendant’s other claims. It also states that three variation orders that had been the subject of the adjudication determination were set aside. The supplied extraction does not provide the detailed reasoning for each variation order, so the article must remain within the bounds of the stated outcome. (Para 5)

"I allowed one of the defendant’s claim for VO and dismissed the defendant’s other claims." — Per Kwek Mean Luck JC, Para 5

The extraction also notes a counterclaim concerning legal costs associated with the adjudication, but it does not provide the final disposition of that specific item. Accordingly, no further factual assertion can safely be made about the legal costs claim beyond the fact that it was one of the issues raised. The court’s summary outcome, however, makes clear that the defendant did not succeed on the bulk of its counterclaims. (Para 0) (Para 5)

The practical significance of this part of the judgment is that the court did not simply accept the adjudication determination wholesale. It scrutinised the variation orders and set aside three of them, while allowing one defendant claim for VO. That demonstrates a careful, itemised approach to construction payment disputes rather than a binary win-or-lose disposition. (Para 5)

Why Does This Case Matter?

This case matters because it clarifies, on its facts, that the liquidated damages dates in the operative clause itself governed the calculation, rather than the separate completion dates the plaintiff sought to rely on. For practitioners, the case is a reminder that the court will read the contract as a whole and will not allow a party to reframe the LD mechanism by isolating one clause from another. The decision also shows that once the operative date is identified, the court will apply the contractual rate to the proven delay period in a straightforward way. (Para 41) (Para 52) (Para 53)

"A plain reading of cl 6 and cl 4, indicates that the relevant dates for assessing LD are those found in cl 6, rather than those in cl 4." — Per Kwek Mean Luck JC, Para 41

The case is also important on repudiation and payment delay. The court reaffirmed that not every non-payment amounts to repudiation, and that a persistent course of payment delays or a protracted delay in payment of a very substantial sum may be required before repudiation is established. That is a significant practical point in construction disputes, where parties often allege that payment defaults justify suspension or termination. The judgment shows that such arguments will be tested against both principle and evidence. (Para 63) (Para 77)

"There may be instances in which a persistent course of payment delays, or a protracted delay in the payment of a very substantial sum amounts to a repudiation of the contract" — Per Kwek Mean Luck JC, Para 63

Finally, the case illustrates the evidential importance of contemporaneous correspondence, witness admissions, and the chronology of site events. The court relied on documentary evidence about glass recommendations and BCA submissions, as well as admissions about outstanding work and the abandonment of the site. For construction lawyers, the case is a useful example of how factual proof can determine whether delay is attributable to one party or the other, and whether a termination is lawful or wrongful. (Para 72) (Para 80) (Para 89) (Para 77)

Cases Referred To

Legislation Referenced

• Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“SOPA”) (Para 4)

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN
• View in judgment: "The Subcontract was divided into two..."
• View in judgment: "On 6 June 2018, the defendant..."
• View in judgment: "There are three main issues arising..."
• View in judgment: "(b) Were there justifiable reasons for..."
• View in judgment: "(c) Is the LD quantum in..."

This article analyses [2021] SGHC 277 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.