Terrenus Energy SL2 Pte Ltd v Attika Interior + MEP Pte Ltd and another appeal

Facts

Terrenus Energy SL2 Pte Ltd engaged Attika Interior + MEP Pte Ltd as main contractor under a Main Builder Agreement dated 5 April 2021 to build a solar power generation facility in Changi Business Park for a contract sum of $5,100,000. The final 40% of the price was payable on issue of the Certificate of Statutory Completion. Terrenus was responsible for supplying the solar panels and the two power grid substations. Partial Completion was due by 30 June 2021, and liquidated damages ran at 0.1% of the contract sum a day. Terrenus terminated the contract without default on 3 February 2022, before the certificate issued on 13 July 2023.

In HC/S 173/2022 Terrenus claimed the cost of rectifying mounting rods (PEG Rods) that it alleged were not embedded to the contractual minimum depth, plus liquidated and general damages for delay. Attika counterclaimed the unpaid balance of the contract sum. The trial judge awarded Terrenus nominal damages of $1,500 for the rods, found Attika entitled to an extension of time of 140 days so that only six days of liquidated damages ($30,600) were due, refused general damages for delay, and awarded Attika the balance sum less $49,861 and US$85,920.90 for three items the parties had agreed to send to Neutral Evaluation. Terrenus appealed in AD/CA 2/2024 and Attika cross-appealed in AD/CA 4/2024 against the deductions.

Issues

1. Whether Terrenus was entitled to the cost of cure as substantial damages for the PEG Rods, and whether an intention to cure is relevant.
2. Whether Attika was entitled to extensions of time and, if so, for how long.
3. Whether Terrenus could claim general damages for delay in addition to liquidated damages.
4. Whether Attika was entitled to the balance of the contract sum, and whether the judge could deduct sums for items sent to Neutral Evaluation.

Holding

The Appellate Division (Woo Bih Li, Kannan Ramesh and See Kee Oon JJAD) dismissed Terrenus's appeal and allowed Attika's cross-appeal. Attika was entitled to the balance sum in full, without the deductions. Costs of both appeals were fixed at $83,000 inclusive of disbursements in Attika's favour.

Reasoning

Terrenus had not proved the extent of non-compliance with the embedment depth: its inspection reports were not truly joint, their photographs were not matched to the rods on site, the partial re-survey showed some rods marked as non-compliant were compliant, and its expert's method of marking affected areas appeared arbitrary. The court nonetheless addressed the cost of cure. It departed from JSD Corporation Pte Ltd v Tri-Line Express Pte Ltd [2023] 3 SLR 1445, holding that an intention to cure is neither a prerequisite nor generally a weighty factor; it is one factor in deciding whether awarding the cost of cure is reasonable and proportionate. Loss arises at the time of breach, and the court is not concerned with how damages are used. Here Terrenus accepted there was no structural risk and could not confirm it would rectify, so awarding $388,566.72 for a minimal deviation on a commercial solar farm would not be reasonable or proportionate. With no evidence of diminution in value, nominal damages were right.

On delay, the contract placed the risk of NParks approval on Terrenus, and Terrenus did not challenge the uncontested expert evidence on the critical path for most windows, so the 140-day extension stood. The liquidated damages clause was a comprehensive estimate of delay losses, and the general damages clause covered only other kinds of loss; remoteness was also not shown.

The no-fault termination clause required payment for all work executed as set out in the contract and was not conditional on the payment schedule's certificate milestone. Attika had substantially performed. But the three deducted items had been taken out of the suit for Neutral Evaluation, so the judge had no jurisdiction to deduct them; the court did not decide their merits.

From the judgment