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

Facts

This was a supplementary judgment of the Appellate Division in cross-appeals AD/CA 125/2021 and AD/CA 129/2021. Zhong Kai Construction Co Pte Ltd (ZK) had engaged Diamond Glass Enterprise Pte Ltd (DG) by a Letter of Award dated 7 November 2016 as subcontractor for aluminium cladding, blast and ballistic doors, windows and related works for a project at Singapore Changi Airport. In Suit No 1282 of 2019, ZK claimed liquidated damages for delay and the cost of replacement and rectification works after DG left the site around 6 June 2018, and sought to overturn an adjudication determination of $197,522.83 in DG's favour. DG counterclaimed for sums under four variation orders.

In its main judgment of 23 December 2022, the court allowed both appeals in part, awarding DG the variation sums for VO 6 and VO 8 and the retention sum of $27,902.75, and adjusting ZK's rectification awards. Afterwards, DG's solicitors wrote asking the court to deal with two points: whether the value of works DG never completed, which DG put at $62,514.30, should be deducted from ZK's award; and an apparent arithmetic error in the main judgment. The parties also could not agree the costs of the appeals, and ZK asked for orders on sums held in court.

Issues

1. Whether ZK's award for replacement works should be reduced by the value of works DG left uncompleted
2. Whether the calculation of DG's entitlement in the main judgment needed correction, and how
3. What costs DG should receive for the two appeals
4. How the sums each side had paid into court should be dealt with

Holding

The court rejected DG's request to deduct the remaining sums, holding that the point had not been pleaded or run at trial. It corrected the main judgment so that DG's entitlement on the adjudication stood at $197,522.83, about 74.6% of its adjudication claim. It awarded DG costs of $70,000 for CA 125 and $50,000 for CA 129 with disbursements of $18,000, and ordered ZK to pay DG 80% of the adjudication fees and late payment interest on the adjudicated amount. After set-off it ordered that $236,412.97 be paid to ZK out of DG's $541,000 in court with the balance returned to DG, that ZK's $211,044 security be returned to ZK, and that ZK's solicitors' undertaking be discharged.

Reasoning

On the remaining sums, the court accepted the principle in Mertens v Home Freeholds Co [1921] 2 KB 526 that the usual measure for an unfinished building contract is the cost of completion less the unpaid contract price. But it said such claims rarely arise in so simple a form, because unfinished work is usually mixed with defective work and other losses such as lost warranties and delay. DG conceded the point was not specifically pleaded, gave no particulars, did not raise it in closing submissions and did not put it to witnesses. Without findings of fact the court could not tie DG's three figures to the evidence, and some of the related ZK claims had been dismissed anyway. The court also criticised DG's solicitors for not identifying the pleadings they relied on when asked.

On the arithmetic, the trial judge had wrongly deducted VO 18, which he had allowed, and had also mistyped a total. Adding VO 18 again, as DG proposed, would double count it, since it was already in the adjudicated sum.

On costs, the court declined to decide simply by counting issues won, and fixed amounts within the Practice Directions range. Since ZK had failed to overturn the adjudication, it was to bear 80% of the adjudication fees and pay late payment interest up to the date of decision.

From the judgment