Vim Engineering Pte Ltd v Deluge Fire Protection (S.E.A.) Pte Ltd

Vim Engineering Pte Ltd (Vim) was a sub-subcontractor on the redevelopment of the building at 5 Shenton Way. It was engaged by Deluge Fire Protection (S.E.A.) Pte Ltd (Deluge), the plumbing, sanitary and gas subcontractor of the main contractor, Samsung C&T Corporation, after Samsung complained that Deluge was badly behind schedule. In July 2016 Deluge agreed to pay Vim $1.75m for a defined scope of plumbing and sanitary works, with variations to be paid separately. Vim left the site on 5 February 2018 after disagreements with Deluge.

In Suit No 1298 of 2018 Vim claimed the balance for its main works and $697,130.58 for variation works. Deluge counterclaimed for the cost of rectification works during the defects liability period and for a long list of back-charges, many of them costs that Samsung had passed down to Deluge. The trial Judge found that Deluge owed $453,912.94 for main works but rejected the variation claim entirely because Deluge's project manager had never given written instructions as cl 16 of the Subcontract required. The Judge allowed the rectification counterclaim of $105,037.74 and back-charges of $858,604.36, leaving Vim with a net liability that was later adjusted to $509,377.26. Vim appealed to the Appellate Division of the High Court in Civil Appeal No 29 of 2021, accepting the main works finding but challenging the rest.

1. Whether the lack of written instructions under cl 16 of the Subcontract barred Vim's variation claim, and whether Deluge had waived that requirement.
2. Whether Vim proved that the claimed variation works lay outside its original scope and substantiated their value.
3. Whether Deluge proved its counterclaim of $105,037.74 for rectification works during the defects liability period.
4. Whether Deluge gave the notice required by cl 19 and proved that Vim caused the losses claimed in each back-charge.

On the writing requirement, the court read cl 16 as lacking the stringent wording of a true condition precedent: it did not say that Vim would lose payment for work done without written instructions. Following Comfort Management v OGSP Engineering Pte Ltd [2018] 1 SLR 979, the absence of writing is not invariably fatal; the contractor simply carries the risk of proving that the variation was ordered. Mansource was distinguished because its clause expressly barred any claim and no alternative basis had been pleaded there. The court also found waiver by election. Deluge's project manager, Mr Sundar, and its site engineer, Mr Tamil, had signed 32 of the 34 disputed variation forms and noted on 24 of them that the claims would go to Samsung for approval, without ever objecting that no written instruction had been given. Deluge had not pleaded that these men lacked authority, so it could not take that point, and in any event Mr Sundar was the very officer empowered to issue written instructions.

On scope, the court rejected Deluge's wide reading of cll 4 and 5. Those clauses covered work associated with Vim's own limited package as itemised in the Quotation, not the whole of Deluge's work for Samsung. The 24 claims mostly concerned repairing damage caused by others or changes instructed by Samsung, and Deluge's own conduct in forwarding them to Samsung showed that it did not treat them as main works. On quantum, the hourly star rates came from a sample form that Deluge's contracts department had sent Vim, and Deluge offered no other figure, so the claims of $388,428 were allowed.

The rectification counterclaim failed because the managing director's evidence was a bare assertion: it did not say what was defective, how or by whom it was fixed, or why a supervisor and workers had to be kept on site for the rest of the defects liability period. The court accepted that it is not common practice for a sub-subcontractor to keep a permanent crew on site during that period.

On back-charges, the court read cl 19 as requiring first a notification in any form and then written notice; these were contractual obligations whose breach sounds in damages rather than conditions precedent. It declined to rely on cl 21, which went beyond Deluge's pleaded case. Written notice was shown only for BC13, BC17 and the PPR pipe part of BC19, and Vim's acceptance of progress payments did not amount to accepting the earlier set-offs. Adopting the approach in Impact Painting, the court required Deluge to prove that each charge was actually incurred, fell within Vim's responsibilities and was caused by Vim's default. The Judge's global approach, relying on Samsung memoranda addressed to Deluge and on manpower figures, did not meet that standard. Most items failed because the documents were illegible, did not mention the work charged, or could not be linked to Vim. BC13 succeeded on contemporaneous timesheets, BC17-3 succeeded only for the Tower A work, BC17-7 succeeded, and BC17-4 attracted only a nominal $100 because part of the delay arose from a shortage of materials that Deluge had to supply and Deluge did not apportion the loss. The 15% administrative charge was excluded.

The Appellate Division allowed the appeal in part. It allowed Vim's claim for variation works in the sum of $388,428, dismissed Deluge's counterclaim of $105,037.74 for rectification works, and reduced Deluge's counterclaim for back-charges from $858,604.36 to $41,788.80, made up of the items BC13, BC17-3, BC17-4 and BC17-7. After setting the unchallenged main works sum and the variation sum against the back-charges, Deluge was held liable to Vim for a net sum of $800,552.14. The court said it would hear the parties on costs.