CHAN TAN & PARTNERS ISSUE 1 OF 1993 NO.

1 COLOMBO COURT #09-26/27 SINGAPORE 179742

Government Contract - delay in completion - reasonably to have been completed within the
whether employer entitled to deduct liquidated extended time and to deduct LAD under cl.31(a) are
damages actions which but for cl.1(d) are to be taken by the
SO on behalf of the government and by reason of
Engineering Construction Pte Ltd v. Attorney cl.1(d) the right to take such actions is reserved to
General & Anor [1993] 1 SLR 390 the director. In the Court's view, the extension of
time letter satisfied the requirements of the first
In this case the plaintiffs, Engineering Construction condition by determining the extension of time
Pte Ltd ("EC"), entered into a contract with the within which the works were to be completed. The
Government of Singapore, for reconstruction road LAD letter, however, did not satisfy the
works. Liquidated & ascertained damages ("LAD") requirements of the second condition that the
were to be payable for delay beyond the completion director must certify that in his opinion the works
date at the rate of $3,000 per day. The second ought reasonably to have been completed within the
defendant, Mott MacDonald (Singapore) Pte Ltd extended time. The Court found that the second
("MM") were appointed the superintending officer letter was not an expression in written form of any
("SO") under the contract. The government wrote 2 certifying process. There was nowhere in the letter
letters to EC. One was for extending the date of the substance of what the director was required to
completion for 5 days ("the extension of time certify. The Court therefore held that LAD was not
letter"). The other was to inform EC that as a result payable and gave the Plaintiffs the declaration
of the works being uncompleted by the extended sought.
date, EC would have to pay the government LAD at
$3000 per day for the period of delay ("the LAD EDITORIAL COMMENT
letter"). EC sought a declaration against both the
defendants that the second defendant as SO was not This is a rare decision on a form of contract used by
entitled to deduct liquidated damages from amounts the government. The certificate in writing under cl
due to the plaintiffs under the said contract. The 31(a) that the works ought reasonably to have been
court observed that 2 conditions must be satisfied completed within the extended time is identical to a
before the plaintiffs are liable to pay LAD, namely: similar requirement under the RIBA-JCT forms of
contract. This decision illustrates the principle that a
(a) the plaintiffs had failed to complete the valid certificate that the works ought reasonably to
works by the contracted completion date or have been completed is a condition precedent to the
within any extended time under cl 32, and employer's right to deduct liquidated damages from
(b) the SO had certified in writing under cl any amount due to the contractor. In A Bell & Son
31(a) that in his opinion the works ought (Paddington) Ltd v CBF Residential Care and
reasonably to have been completed. Housing Association (1989) 46 BLR 102 it was also
held that a similar architect's certificate under clause
It was argued that the 2 letters from the government 24 of JCT 80 was a condition precedent to the right
were sufficient to satisfy the 2 conditions. It was also to deduct liquidated damages against payment due to
submitted on the defendants' behalf that by reason of the contractor under interim certificates. This case
cl 1(d), the right under cl 32(a) to make a fair and followed a line of cases that include Brightside
reasonable extension of time and the right under cl Kilpatrick Engineering Services v Mitchell
31(a) to certify in writing that in his opinion the Construction [1975] 2 Lloyd's Rep. 493 and Ramac
works ought reasonably to have been completed Construction Co Ltd v J.E. Lesser (Properties) Ltd
within the extended time is reserved to the director. [1975] 2 Lloyd's Rep. 430. The decision in
Engineering Construction Pte Ltd v. Attorney
The Court found that to make a fair and reasonable General & Anor is therefore a useful local
extension of time for completion of the works under affirmation of a well accepted principle enunciated
cl.32(a) and to certify that the works ought in U.K cases. It should be noted that a Delay
Certificate under cl 24 of the SIA standard form is with the passing of title in respect of
expressly required as a condition precedent to the 'unfixed' goods and materials. It did not
deduction of liquidated damages by the employer. make provision for the passing of title in
respect of 'fixed' materials and goods
Contract - implied term - installation of because the law relating to passing of title
escalators - whether escalators had become in respect of fixtures is well settled.
fixtures - passing of property - whether the 3. Quite apart from the question whether there
suppliers of escalators can unfix escalators and was any contract between the parties after
retake possession of them the sub-contract had been entered into,
there was nothing in the letters to indicate
People's Park Chinatown Devt Pte Ltd (in what the intention of the parties might have
liquidation ) v Schindler Lifts (S) Pte Ltd [1993] 1 been as to the passing of property. That
SLR 591 being so, there was no basis on which to
imply a term in the letters that the
The appellants were the developers of a project. The respondents were conferred the right to
respondents were sub-contractors in the installation enter upon the site, unfix the escalators and
of lifts and escalators in the project. Ten escalators retake possession of them.
were delivered by the respondents which were
hoisted into position in specially constructed spaces EDITORIAL COMMENT
where they rested on their own weight. The design
of the building and the escalators was such that there This case is a good illustration of what can occur
was no necessity for the escalators to be affixed by when the employer is wound up. In such
bolts, screws or otherwise. The escalators had not circumstances, when the supplier is not paid, it will
been tested or commissioned as the power supply be important to know whether he can retake
had not been connected. A winding-up order was possession of the equipment or material he supplied.
afterwards made against the appellants. The This case turned primarily on the fact that there was
respondents sought a declaration that the ten no direct contract between the employer (the wound-
escalators belonged to them. up company) and the supplier; apart from this, the
court also found no express provision relating to the
The issues raised can be summarised as follows: passing of property nor could it find any basis to
imply a term allowing the supplier to enter the site.
1. Whether the escalators were fixtures so that A passage (part of which is reproduced below) in
property in them passed to the appellants Hudson's Building and Engineering Contracts (10th
when they were installed. ed) at p 655 was approved:
2. If the escalators were fixtures, whether in
the circumstances there was a contractual " But once the builder has affixed
provision under which the property in the materials, the property in them
escalators was not to pass except upon passes from him, and at least as
payment or whether a contractual right was against him they become the
conferred on the respondents to remove the absolute property of his employer
escalators. .. The builder has no right to
detach them from the soil or
The only provision that dealt with the passing of building .."
property was cl. 14 of the main contract which
however confined itself to 'unfixed' materials and
goods. The Court of Appeal in allowing the appeal
held as follows:

1. The escalators when hoisted into place