Lim Poh Yeoh v TS Ong Construction: Setting Aside Statutory Demand Under SOPA for Building & Construction Law Dispute

In Lim Poh Yeoh (alias Lim Aster) v TS Ong Construction Pte Ltd, the High Court of Singapore heard an appeal regarding the setting aside of a statutory demand. Ms. Lim Poh Yeoh engaged TS Ong Construction for building works, leading to a dispute over payment and subsequent adjudication under the Building and Construction Industry Security of Payment Act (SOPA). Ms. Lim commenced Suit 92 of 2015 against TS Ong Construction, claiming damages for alleged breaches of contract. TS Ong Construction issued a statutory demand for the outstanding amount owed under the adjudication determination. The Assistant Registrar dismissed Ms. Lim's application to set aside the statutory demand, but the High Court allowed the appeal, holding that a statutory demand founded on an adjudication determination can be set aside if the debtor has a valid cross demand. The court found that Suit 92 of 2015 presented genuine triable issues and constituted a valid cross demand.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding setting aside a statutory demand under SOPA. The court held that a statutory demand can be set aside if the debtor has a valid cross-demand.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
TS Ong Construction Pte LtdRespondentCorporationAppeal DismissedLost
Lim Poh Yeoh (alias Lim Aster)AppellantIndividualAppeal AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Edmund LeowJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Alvin ChangM&A Law Corporation
Carmen ChenM&A Law Corporation
Chong Xin YiIgnatius J & Associates
Joseph IgnatiusIgnatius J & Associates

4. Facts

  1. Lim Poh Yeoh engaged TS Ong Construction to construct two semi-detached houses.
  2. A dispute arose over a progress payment claim of $138,660.16.
  3. TS Ong Construction obtained an adjudication determination under SOPA.
  4. Lim Poh Yeoh commenced Suit 92 of 2015 claiming damages for breach of contract.
  5. TS Ong Construction issued a statutory demand for the outstanding adjudicated amount.
  6. Lim Poh Yeoh applied to set aside the statutory demand, arguing a valid cross demand.
  7. The Assistant Registrar dismissed the application, but the High Court allowed the appeal.

5. Formal Citations

  1. Lim Poh Yeoh (alias Lim Aster) v TS Ong Construction Pte Ltd, HC/OSB 66 of 2015(Registrar’s Appeal No 350 of 2015), [2016] SGHC 179

6. Timeline

DateEvent
Agreement signed between Lim Poh Yeoh and TS Ong Construction Pte Ltd
Work done by TS Ong Construction Pte Ltd
Interim certificate issued
Progress payment claim issued by TS Ong Construction Pte Ltd
TS Ong Construction Pte Ltd referred matter to adjudication
Adjudication determination made in favor of TS Ong Construction Pte Ltd
Judgment entered in terms of the adjudication determination
Garnishee order applied and sum recovered from Lim Poh Yeoh's bank account
Order of Examination Debtor applied against Lim Poh Yeoh
Writ of seizure and sale obtained against the property
Lim Poh Yeoh commenced Suit 92 of 2015
Lim Poh Yeoh applied for a stay of execution of the Judgment
Appeal dismissed by Foo Chee Hock JC
Statutory demand issued by TS Ong Construction Pte Ltd
Copy of the statutory demand delivered to Lim Poh Yeoh's home
Lim Poh Yeoh returned to Singapore
Lim Poh Yeoh filed application to set aside the statutory demand
Assistant Registrar dismissed the summons
Appeal allowed and statutory demand set aside

7. Legal Issues

  1. Setting Aside Statutory Demand
    • Outcome: The court held that the statutory demand should be set aside as the appellant had a valid cross demand.
    • Category: Procedural
    • Sub-Issues:
      • Validity of service
      • Cross demand exceeding statutory demand debt
  2. Cross Demand
    • Outcome: The court found that the appellant's claims in S 92/2015 raised genuine triable issues and constituted a valid cross demand.
    • Category: Substantive
    • Sub-Issues:
      • Genuine triable issue
      • Quantification of cross claim
  3. Validity of Service
    • Outcome: The court held that the statutory demand had been validly served.
    • Category: Procedural
    • Sub-Issues:
      • Substituted service
      • Reasonable steps to effect personal service
  4. Res Judicata
    • Outcome: The court held that the appellant was not precluded from bringing the application by virtue of the doctrine of res judicata.
    • Category: Procedural
    • Sub-Issues:
      • Issue estoppel
      • Abuse of process

8. Remedies Sought

  1. Setting Aside Statutory Demand
  2. Damages

9. Cause of Actions

  • Breach of Contract
  • Debt Recovery

10. Practice Areas

  • Construction Law
  • Commercial Litigation
  • Insolvency Law

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tan Hup Yuan Patrick v The Griffin Coal Mining CoHigh CourtYes[2014] 4 SLR 221SingaporeDistinguished from the present case as the appellant does not seek to deny the judgment debt, but asserts a countervailing liability.
Re Rasmachayana Sulistyo (alias Chang Whe Ming) ex parte The Hongkong and Shanghai Banking Corp Ltd and other appealsN/AYes[2005] 1 SLR(R) 483SingaporeCited for the principle that the service provisions of bankruptcy statutes are permeated by an underlying philosophy of pragmatism and substantial justice.
The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Limited (nTan Corporate Advisory Pte Ltd and others, other parties) and another appealCourt of AppealYes[2015] 5 SLR 1104SingaporeCited for clarifying the doctrine of res judicata, comprising cause of action estoppel, issue estoppel, and the doctrine of abuse of process.
Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan No 301Court of AppealYes[2005] 3 SLR(R) 157SingaporeCited for the four conditions that have to be satisfied in order for the doctrine of issue estoppel to be invoked.
Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2)N/AYes[1967] 1 AC 853N/ACited for the principle that for an estoppel to arise, the issue that the court is being asked to decide afresh must already have been part of the ratio decidendi of the earlier decision.
Goh Nellie v Goh Lian Teck and othersN/AYes[2007] 1 SLR(R) 453SingaporeCited for the principle that the inquiry for abuse of process is directed at whether, having regard to the substance and reality of the earlier action, the issue reasonably ought to have been raised.
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdN/AYes[2015] 5 SLR 482SingaporeCited for the principle that an adjudication conducted under the SOPA is not supposed to be a forum for careful and considered deliberation.
SEF Construction Pte Ltd v Skoy Connected Pte LtdN/AYes[2010] 1 SLR 733SingaporeCited for preserving the right of the parties to argue that the adjudication determination was wrong as part of their contentions in relation to disputes over the contract and the works which are being dealt with in arbitral or court proceedings.
Wee Soon Kim Anthony v Lim Chor PeeN/AYes[2006] 2 SLR(R) 370SingaporeCited for the principle that it is not the function of the bankruptcy court to conduct a full hearing of the putative claim.
Mohd Zain bin Abdullah v Chimbusco International Petroleum (Singapore) Pte Ltd and another appealN/AYes[2014] 2 SLR 446SingaporeCited for the principle that if the test for a genuine triable issue is satisfied, the statutory demand should normally be set aside.
Remblance v Octagon Assets LtdN/AYes[2010] 2 All ER 688N/ACited for the principle that it would usually be unjust to require a debtor to face the consequences of bankruptcy where he appears to have a valid cross claim.
Hurst v Bennett and othersN/AYes[2001] 2 BCLC 290N/ACited for the principle that the crux of the inquiry is whether the debtor has a cross-claim against the creditor the effect of which is that, if successful, would liquidate the statutory demand debt.
Diploma Construction (WA) Pty Ltd v KPA Architects Pty LtdSupreme Court of Western AustraliaYes[2014] WASCA 91AustraliaCited for the principle that the validity of a statutory demand premised on a judgment debt founded on an adjudication determination could not be impugned on the basis that there is a genuine dispute as to the validity of the underlying debt.
Douglas Aerospace Pty Ltd v Indistri Engineering Albury Pty LtdSupreme Court of New South WalesYes[2015] NSWSC 167AustraliaCited for the principle that a statutory demand founded on an adjudication determination may not be set aside on the ground that there is a genuine dispute over the judgment debt; however, it may be set aside on the ground that the debtor has a genuine cross claim.
Shaw and another v MFP Foundations & Piling LtdEnglish High CourtYes[2010] 2 BCLC 85United KingdomCited for the principle that the court will have regard to all relevant circumstances, and will not be circumscribed in the exercise of its discretion when considering applications to set aside statutory demands founded on judgments entered on adjudication determinations.
R & S Fire and Security Services Ltd v Fire Defence plcN/AYes[2013] 2 BCLC 92United KingdomFollowed the decision in Shaw and another v MFP Foundations & Piling Ltd.
Laywood v Holmes Construction Wellington LtdNew Zealand Court of AppealYes[2009] 2 NZLR 243New ZealandCited for the principle that the expression 'proceedings for the recovery of a debt' included insolvency proceedings.
Chan Siew Lee Jannie v Australia and New Zealand Banking Group LtdCourt of AppealYes[2016] 3 SLR 239SingaporeCited for the principle that bankruptcy proceedings are not intended as a means for a single creditor to enforce his debt but is instead a method for the collective realisation of the assets of the debtor in order to maximise recovery for the general body of creditors.
Jia Min Building Construction Pte Ltd v Ann Lee Pte LtdN/AYes[2004] 3 SLR(R) 288SingaporeCited for the principle that a contractor is not entitled to suspend work merely because his hirer has not paid him.
Denmark Skibstekniske Konsulenter A/S I Likvidation (formerly known as Knud E Hansen A/S) v Ultrapolis 3000 Investments Ltd (formerly known as Ultrapolis 3000 Theme Park Investments Ltd)N/AYes[2011] 4 SLR 997SingaporeCited for the principle that the fact that a cross claim could have been brought during earlier arbitration proceedings between the parties did not absolutely preclude a debtor from using it as a ground for resisting a winding up.
Max Cooper & Sons Pty Ltd v M & E Booth & Sons Pty LtdN/AYesN/AN/ACited for the principle that an adjudication determination does not give rise to any issues of res judicata in later civil proceedings.

13. Applicable Rules

Rule Name
Bankruptcy Rules r 96
Bankruptcy Rules r 111(1)
Bankruptcy Rules r 278
Bankruptcy Rules r 98(2)

14. Applicable Statutes

Statute NameJurisdiction
Bankruptcy Act (Cap. 20)Singapore
Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed)Singapore
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed)Singapore
Construction Contracts Act 2004 (WA)Australia
Corporations Act 2001 (Cth)Australia
Housing Grants, Construction and Regeneration Act 1996 (UK)United Kingdom
Construction Contracts Act 2002 (NZ)New Zealand

15. Key Terms and Keywords

15.1 Key Terms

  • Statutory Demand
  • Adjudication Determination
  • Cross Demand
  • Building and Construction Industry Security of Payment Act
  • SOPA
  • Bankruptcy Rules
  • Genuine Triable Issue
  • Substituted Service
  • Res Judicata

15.2 Keywords

  • statutory demand
  • adjudication
  • SOPA
  • cross demand
  • bankruptcy
  • construction law

17. Areas of Law

Area NameRelevance Score
Building and Construction Industry Security of Payment Act90
Construction Law85
Bankruptcy70
Contract Law60
Statutory Interpretation50

16. Subjects

  • Construction Dispute
  • Bankruptcy
  • Civil Procedure
  • Adjudication