33Club Pte. Ltd. v Design Cliniq Pte. Ltd.

Facts

33Club Pte Ltd, which runs a private members' club at 22 Malacca Street, engaged Design Cliniq Pte Ltd around May 2022 to renovate its premises, with no written contract. Work proceeded on a rough bill of quantities sent over WhatsApp, which the club's managing director, Mr Tan, told the contractor to "just proceed" with. When insurance was arranged, Mr Tan entered a "Contract value" of "$500k". The club paid two sums of $50,000. The club itself bought travertine fluted tiles from a supplier in China, and the contractor fixed them to the walls with adhesive. On 6 December 2022 several tiles fell, injuring a person helping the club inspect the works. The contractor refixed them with screws by 8 December 2022, and a professional engineer certified the installation safe on 18 January 2023. A door closer also came loose.

The contractor invoiced about $609,719.50 for the works and a further $92,888.31 for professional fees, drawings and project management. Under the Security of Payment Act an adjudicator awarded it $86,281.40, which the club paid. In HC/OC 552/2023 in the General Division of the High Court, the club sued in negligence over the tiles, the door closers and other alleged defects, eventually claiming losses of $1,472,818.99, including losses linked to a luxury watch trader leaving the premises. The contractor counterclaimed $513,527.42 or a reasonable sum.

Issues

1. Whether the renovation works, in particular the screw rectification of the tiles, were defective or fell below the standard of care
2. Whether the adjudication determination prevented the court from reassessing the contractor's counterclaim
3. Whether the contract covered labour only or labour and materials, and whether a price of $500,000 had been agreed
4. What sum the club must pay for the works and the additional invoices

Holding

The court allowed the club's claim and the contractor's counterclaim in part. The claim succeeded only to the extent that there were some minor imperfections in the works, which were taken into account through a reduced price. The counterclaim succeeded to the extent that the contractor was entitled to a reasonable price for the invoiced works, based on a competing contractor's quotation of $411,786.90, plus professional fees and project management fees of $82,237.50. After credit for the two payments and the adjudicated amount, the club was ordered to pay the contractor a net global sum of $307,743. Costs were left for directions if not agreed.

Reasoning

On defects, the court found both sides shared blame for the original tile failure: the club bought tiles from an overseas source with no installation guidance and gave inaccurate dimensions, while the contractor did no simple pull-out test and conceded poor bonding and workmanship. The real issue was the rectification. The club knew of and engaged with the screw method, and the claim that it was only temporary was an after-thought. The court accepted the engineer's evidence, unrebutted by any engineer for the club, that the screws were safe for tiles weighing about 5kg each, and preferred the contractor's expert, since the club's expert had assumed tiles of 30kg and relied on inapplicable guidelines. No tile had fallen or cracked since. Only the visible putty around the screws was an aesthetic shortfall. The door closer evidence was sparse, and most other complaints were raised two years late, some being plainly not the contractor's responsibility.

On losses, the court found the claimed sums had ballooned, involved double counting and lacked support. It gave no weight to the watch trader's evidence, noting that Mr Tan had been a director and shareholder of that trader, which was not disclosed in his evidence, and that the trader's notice and profit figures did not fit its account.

On the adjudication, temporary finality under the Security of Payment Act means the court may decide the dispute afresh while taking account of the adjudicator's reasoning.

On the contract, materials were within scope, as the messages and invoices showed. The "$500k" figure was given to obtain insurance, not as an agreed price, and the contractor's handwritten note of rates was largely unreadable and could not found an objective agreement. A term that a reasonable price be paid was implied. The court used the competing quotation, at the lower end of the reasonable range, as that price and treated the discount from the invoice as covering the minor defects. It allowed project management fees, since the club's own case showed such services were given, but disallowed the unproven drawings and a small invoice whose figures were unexplained.

From the judgment