1 In Suit 907 of 2021 (“this suit”), Pro-Active Engineering Pte Ltd (“Pro-Active”) is suing Prime Structures Engineering Pte Ltd (“Prime”) for $558,559.97 (“the claim”) arising out of works carried out on a building known as SOUTHERNWOOD located at No 79 Robinson Road, Singapore (“the project”). The completed project is now known as CapitaSky.

2 The developer of the project was Capitaland and the main contractor was Shimizu Corporation (Singapore) Ltd (“Shimizu”). One of Shimizu’s contractors was Positive Engineering Pte Ltd (“Positive”) while one of its subcontractors was Prime which was contracted to provide engineering works for the project.

3 In turn, Prime engaged Pro-Active to supply, fabricate and install steel works for part of the project. This was done by way of a letter of appointment dated 9 January 2019 from Prime to Pro-Active (“the LOA”) ¹ which both parties countersigned in February 2019 ² .

4 Under the terms of the LOA, Pro-Active would be paid $1,161,204.58 (“the contract sum”) for its scope of works which was to supply, fabricate and install steel works at the shopfront, roof crown, sky terrace and roof trellis/screen (“the contracted works”) which were located on the first, second, twenty-first and twenty-eight floors. Henceforth, where reference is made to the “roof crown works”, it will mean the roof crown steel works contracted by Pro-Active. The contracted works would commence on 9 January 2019 and were to be completed on or before 30 June 2019. The contracted works would be subject to re-measurement with payment to be based on the actual works carried out. The court will return to the LOA and its material terms later in the course of the judgment. It should be noted that it was Pro-Active’s case that it carried out variation works for the project as well.

5 The person in charge of the contracted works for Pro-Active was its project manager Kuon Yee Yen (“Kuon”) who is known as Gary while Prime’s persons in charge were its project director Yap Wai Keong (known as “Frankie”) and its project manager Wong Junjie Andrew (“Andrew”).

6 Under the original schedule for the contracted works, the following were the timelines:

(a) 18 July to 3 September 2019 – fabrication and supply of steel columns;

(b) 14 August to 21 September 2019 – delivery of steel columns to Singapore from China; and

(c) 2 September to 10 October 2019 – installation of steel columns.

Pro-Active failed to meet the above timelines as well as the completion timeline of 30 June 2019 in [4] for reasons which are set out below.

7 In his affidavit-of-evidence-in-chief (“AEIC”), Kuon affirmed ³ that he decided to, and did, source the materials for the roof crown works from China, in particular from a steel supplier in Qingdao called Qingdao Eternity Industry Co Ltd (“Qingdao Co”). He informed Prime which informed Shimizu in turn on 12 July 2019. On 15 July 2019, Shimizu e-mailed Prime with a list of queries and its concerns about the quality of steel purchased from China. Prime replied on the same day to allay Shimizu’s concerns.

8 On 30 August 2019, Prime sent Pro-Active a list of instructions/inquiries and requirements in regard to the roof crown works. These were:

(a) Prime would hire a neutral third party (“the third party”) to ensure that all steel supplied and fabricated by Qingdao Co complied with specifications;

(b) where would the third party be staying while in China and what provisions would be made for his transport and meals;

(c) Pro-Active had to confirm the standard and grade of steel to be used;

(d) Pro-Active was to confirm the date five days before the factory viewing appointment; and

(e) after the first factory visit, Pro-Active was to courier to Singapore a list of materials for testing.

Kuon claimed he complied with Prime’s requirements in order to proceed with the contracted works.

9 On 5 September 2019, Andrew sent a lengthy e-mail to Pro-Active setting out instructions on works to be done, how they were to be carried out, when the works were to be completed and to cease certain steel works pending approval by the Building and Construction Authority (“BCA”). In regard to the roof crown works, Andrew warned Pro-Active that the owner was considering revoking those works from Pro-Active’s scope of works if not for the fact that Prime said it had purchased the steel. Andrew added that there were strong objections to Pro-Active’s request to fabricate the steel for the roof crown works in China. He also referred to Pro-Active’s slow progress, warning Pro-Active that Capitaland may exercise their right to liquidated damages for the delay.

10 Around 29 October 2019, Prime instructed Pro-Active to carry out certain works for the roof crown beams which included installing bigger baseplates without holes on the trusses which were to be fabricated by Qingdao Co. Pro-Active took this conduct as a sign that Prime did not object to Pro-Active’s sourcing for materials in China for the roof crown works.

11 In or about early December 2019, Kuon went to China to supervise the fabrication of materials for the roof crown works. However, after the materials he ordered had been shipped on 25 December 2019 to Singapore, he alleged that he received a call from Prime telling him that Pro-Active no longer needed to do the roof crown works. Kuon was shocked as days earlier, he was in communication with Prime on securing nuts and bolts for the roof crown works. He had even sent a summary list of the nuts and bolts meant for those works. He claimed there was no prior indication that Prime intended to terminate the services of Pro-Active.

12 As such, in Kuon’s AEIC ⁴ , he argued that the roof crown works should be deducted from Pro-Active’s scope of works and the amount deducted from the contract sum which should then be adjusted, to reflect the actual works done by Pro-Active. He pointed out that the contracted works were a re-measurement contract in any case. It should be noted at this stage that the materials purchased from Qingdao Co for the roof crown works were paid by a letter of credit (“the L/C”) established by Prime at Pro-Active’s request as the latter did not have the means to make payment.

13 The upshot of the communication between Pro-Active and Prime was that in and after December 2019, Pro-Active stopped doing any work relating to the roof crown and Prime and/or Shimuzu arranged for the roof crown works to be carried out by another subcontractor Kong Hwee Iron Works & Construction Pte Ltd (“Kong Hwee”).

14 Kuon’s AEIC ⁵ alleged that Pro-Active carried out additional/variation works for Prime on the project. In that regard, the parties entered into a Variation Order dated 6 January 2020 ⁶ (“the Variation Order”). Kuon disclosed that Pro-Active had been paid for some of the variation works in the progress claims that he submitted. The variation works were initially estimated to amount to $1,351,320.95. Kuon alleged that Pro-Active’s works were delayed by Prime’s delay in making payment on Pro-Active’s progress claims. This allegedly led to financial difficulties for Pro-Active and affected the latter’s materials procurement, its payment of salaries and expenses, and its payments to its suppliers. Kuon complained that it was unfair for Prime to charge Pro-Active for delay when the delay was caused by Prime’s requests for additional works. The court will return to the issue of variation works and delay later in the judgment.

15 Kuon added ⁷ that Pro-Active would have completed the contracted works on time if not for Prime’s delayed payments. He claimed that Pro-Active, by 14 February 2020, had only 10% of its scope of works left to be completed. Kuon alleged ⁸ Prime was still giving instructions to vary the scope of the contracted works after the contractual completion deadline. He added that in so doing, Prime gave Pro-Active the impression that the project’s completion date would be pushed back.

16 Pro-Active disputed the back charges Prime levied on Pro-Active, part of which related to installation costs charged to Prime by Shimizu for the roof crown works carried out by Kong Hwee. Another item of back charge related to interest charged on extending the L/C ⁹ to pay for the roof crown materials from China.

17 In his AEIC ¹⁰ , Kuon asserted that Pro-Active had completed all the contracted works (save for the omitted roof crown works). The project’s Temporary Occupation Permit (“TOP”) was issued on 28 April 2020. Consequently, Pro-Active should be paid for the contracted works as well as for the additional variation works Prime requested. Kuon deposed that Prime had paid Pro-Active $822,011.15 leaving the claim amount as the balance outstanding on the contract sum. As for variation works, Pro-Active claimed $679,443.35.

18 When Pro-Active did not receive payment of the two sums in [17], it commenced proceedings in this Suit.

19 On 6 November 2021, Pro-Active filed the writ of summons in this suit. In its statement of claim (“SOC”), Pro-Active referred to and relied on the terms of the LOA, in particular clauses 1.2 (on re-measurement), 5 (on progress payments) and 5.5 (on retention moneys) for its claim.

20 The computation by Pro-Active for its claim is as follows:

21 In the alternative, Pro-Active claimed damages on a quantum meruit basis, quantified based on the claimed sum of $558,559.97.

22 Apart from one paragraph ¹¹ in the SOC, Pro-Active made no reference to the removal of the roof crown works from Pro-Active’s scope of works. In para 8, Pro-Active averred that some time in December 2019, it was instructed by Prime that its services were no longer required for the roof crown works. Consequently, Pro-Active deducted that portion from the contracted works.

23 In contrast to the brief SOC, Prime filed a lengthy defence and counterclaim (“D&CC”). Other than the clauses Pro-Active referred to in the SOC which were alluded to earlier at [20], Prime relied on other clauses in the LOA. These included clause 4.1 (on liquidated damages), clause 5.7 (on right of set-off), clause 8 (requirement of weekly progress reports) and clause 9 (on default by Pro-Active). Prime also cited clause 1(b)(i) of Appendix C to the LOA wherein Pro-Active has to indemnify Prime for costs, claims, damages etc if Pro-Active fails to perform in accordance with the LOA.

24 Prime averred that the final contract sum for Pro-Active’s scope of works (including variation works) was $2,512,531.53.

25 Prime denied that it had instructed Pro-Active that its services were no longer required for the roof crown works. Consequently, Pro-Active was not entitled to remove all costs in relation thereto ($494,232.12) from the contracted works as well as from the variation works. ¹²

26 Prime alleged that in or around December 2019 it because apparent that Pro-Active was unable to carry out works relating to the roof crown. Prior thereto, Prime had issued multiple delay notices (in September and October 2019) to Pro-Active relating to the contracted and variation works. Shimizu had informed Prime that if the roof crown works could not be carried out, Shimizu would take over the same and charge Prime for all the costs thereby incurred.

27 Prime issued a catch-up schedule to Pro-Active on 6 December 2019 but Shimizu informed Prime on the same day that it had no confidence in Pro-Active’s carrying out the installation component of the roof crown works. As such, Shimizu would hire its own contractor to carry out the installation component of the roof crown works and Shimizu would set-off the costs against payment due to Prime. In turn, Prime informed Pro-Active on 9 December 2019 that it would invoice Pro-Active for the costs Shimizu charged to Prime for the installation component of the roof crown works.

28 Prime denied it owed any money to Pro-Active and asserted it had paid Pro-Active $1,581,681.15 as follows:

(a) $45,557.69 as advance payment;

(b) $765,875.00 for the L/C; and

(c) $770,248.46 as progress payments.

29 Prime alleged that Pro-Active breached the LOA as it was unable to carry out the installation component of the roof crown works including the variation works. As a result, Prime suffered loss and damage as Shimizu back charged Prime $1,018,678.49 for those works:

(a) Installation costs for the roof crown:   $582,483.66

(b) Back charges:     $436,194.83

30 Prime averred that Pro-Active was in delay for the contracted works as well as the variation works and failed to complete the same by the prescribed completion date of 29 November 2019. Pro-Active only completed all the works on 4 January 2020. Consequently, Prime claimed liquidated damages against Pro-Active for 36 days of delay amounting to $90,450.92 (based on 0.1% of the total contract sum per day). Prime’s claim therefore totalled $1,109,129.41 ($1,018,678.49 + $90,450.92).

31 In its Reply and Defence to the Counterclaim (“R&DCC”) ¹⁴ , Pro-Active not surprisingly disputed Prime’s allegation that it did not instruct Pro-Active that the latter’s services were not required for the roof crown works.

32 Pro-Active further denied Prime’s counterclaim for the back charges rendered by Shimizu and Prime’s claim to a set-off and liquidated damages. Pro-Active asserted that even if it did not complete the contracted works by 29 November 2019 (which it denied), it was not liable for any liquidated damages due to various acts of prevention by Prime and/or variation works that Prime instructed which caused delay to Pro-Active’s contracted works.

33 Pro-Active relied on Prime’s Variation Order No VO3 dated 6 January 2020 ¹⁵ as evidence of Prime’s instructions on variation works. Pro-Active listed ten items of variation works that Prime allegedly instructed Pro-Active to carry out. Since there was no extension of time clause in the LOA, Pro-Active contended that time was at large and Prime was not entitled to impose liquidated damages on pro-Active. ¹⁶

34 In the alternative, Pro-Active averred ¹⁷ that by issuing instructions to Pro-Active after 29 November 2019 (at [33]), Prime had communicated its intention to continue with the LOA notwithstanding Pro-Active’s alleged failure to complete the contracted works by 29 November 2019.

35 Consequently, Pro-Active denied Prime was entitled to any relief claimed in its counterclaim. Prior to the commencement of trial, Prime indicated it would discontinue its counterclaim and leave the issue of costs of discontinuance to the court to determine.

36 Four witnesses testified at the trial of this Suit. Kuon was Pro-Active’s only witness while Prime had three witnesses who were its managing-director Sonny Bensily (“Sonny”), its project director Frankie and its project manager Andrew (see [5] above).

37 The court turns to Kuon’s cross-examination for the additional facts that were adduced in this Suit as his AEIC contained more arguments in meeting Prime’s D&CC than facts. During cross-examination, Kuon did not dispute the obligations of Pro-Active as set out in the LOA and which Prime relied on in the D&CC ¹⁸ . He further agreed that Pro-Active’s contract was a re-measurement contract ¹⁹ . However, he repeatedly insisted that as Pro-Active did not carry out the roof crown works, those works should simply be taken out of Pro-Active’s scope of works and deducted from the contract price (to which Prime disagreed).

38 On the issue of delay, Kuon’s attention was drawn to Andrew’s e-mail to Pro-Active dated 5 September 2019 ²⁰ which set out detailed instructions to Kuon for various types of work on various floors. The e-mail contained the following extracts:

Despite the clear wording in the above extracts, Kuon disputed Pro-Active was in delay in the contracted works. He said he did not reply to Andrew’s e-mail as he chose instead to complete the outstanding works as soon as possible.

39 The schedule of works for the roof crown on the 28th floor was exhibited in Andrew’s AEIC ²¹ . His AEIC also contained e-mails from Prime to Pro-Active ²² that showed the latter was informed on 22 August 2019 that approval from the relevant authorities had been obtained for the roof crown works and Pro-Active was instructed “to proceed to start the purchase & fabrication of the roof crown steel works”. Then on 30 August 2019 ²³ , Andrew e-mailed Pro-Active to inquire about fabrication of the roof crown materials in China. He further inquired about the proposed visit on 9 September 2019 to the Chinese factory producing the materials by a checker from Arup Singapore Pte Ltd (“Arup”) and representatives from Prime and Capitaland. After the inspection, Andrew required Pro-Active to courier to Singapore for testing the raw steel and galvanised steel to be fabricated to ensure the latter complied with the specifications S355 and Q345.

40 On 31 October 2019 ²⁴ , Andrew e-mailed to Pro-Active a formal delay notice citing three instances of delayed works for the contracted works at level 2. Prime gave notice that unless Pro-Active showed immediate and considerable improvement, Prime would be forced to terminate Pro-Active’s services and find a replacement contractor. Cross-examined, Kuon did not deny the delay ²⁵ but pointed out it had nothing to do with the roof crown works. He did not reply but decided to resolve the delay issue by adding more manpower to expedite the outstanding works. To Kuon, the letter was “just any other normal letter” ²⁶ and Kuon took it as a need for him to ramp up his manpower resources. He further claimed there were no other letters informing Pro-Active of delays to works on levels 1 and 2 and even on the 21st floor. Kuon disagreed the letter constituted a final warning to Pro-Active. He added that Pro-Active completed the scheduled works in November or December 2019.

41 Kuon was then confronted with Andrew’s e-mail dated 6 December 2019 ²⁷ where Andrew noted Pro-Active only had eight workers on-site on 5 December with five workers on night shift, even though there were three main areas of work and that was “the last straw”. Andrew added

Andrew’s reference to “Yabo” was to another subcontractor of Prime. Despite Andrew’s aforesaid e-mail, Kuon disagreed inadequate manpower was one reason for the delay in Pro-Active’s works. ²⁸

42 Adding to Pro-Active’s woes, Prime had as far back as July 2019, e-mailed Kuon ²⁹ that Prime’s quality assessor/control engineer had issued non-conformance reports (“NCR”) against Pro-Active for missing anchor bolts/nuts and rusty bolts/nuts. Koun continued to maintain his disagreement ³⁰ pointing out that the issuance of an NCR was not a performance issue. NCRs were to Kuon part of an entire process and very common. It was the responsibility of the quality assessor/engineer to bring such NCRs to his notice for rectification before the time of inspection arrives.

43 It did not help Pro-Active that there was subsequently a delay notice addressed to Sonny and Frankie by Shimizu’s project manager on 3 December 2019 relating to the roof crown works ³¹ . This was after the inspection of the factory in China as is apparent from the extracts set out below from Shimizu’s e-mail:

Although Kuon admitted he sourced for the factory, he disagreed that he failed to ensure that the fabrication and supply was on schedule. Kuon claimed that Prime, and Andrew in particular, was in close contact and liaised direct with, Qingdao Co. However, because he was originally in charge of doing the installation, Kuon claimed he took the initiative to make sure the materials would arrive in Singapore in time for the installation. He merely acted as a coordinator to ensure the materials were shipped to Singapore ³² .

44 Kuon maintained his stand even when Pro-Active installed undersized steel frames, according to an e-mail from Shimizu to Andrew dated 28 August 2019. ³³

45 Kuon’s attention was drawn to Andrew’s e-mail to Kuon, with Sonny and Frankie as recipients as well, on 6 December 2019, setting out a catch-up schedule with a delay of seven days to the original date of 30 January 2020. Andrew added that there was a need for three fabrication factories and a separate factory for painting was required.

46 On 13 December 2019 ³⁴ , Shimizu rejected Prime’s programme to finish the installation portion of the roof crown works by February 2020. Shimizu cited the reason for the delay to works on levels 1, 2 and 21 to be due to poor performance and shortage of manpower. Questioned, Kuon claimed he was in China when Shimizu’s e-mail was received. He said there was no discussion about a third party contractor taking over the roof crown works because while he was in China, the focus then was on the schedule of work and arranging for the materials to be shipped to Singapore. Kuon added he did not receive any delay notice either from Prime or Shimizu. He claimed he was unaware of Shimizu’s meeting with Prime on 12 December 2019 and denied he was told by Frankie in a telephone call after that meeting that Pro-Active need not carry out the installation component of the roof crown works.

47 Kuon claimed that Frankie had informed him only on or about 15 December 2019 that Shimizu was considering looking for another subcontractor (Kong Hwee). Andrew told him over the telephone on 27 December 2019 that Pro-Active’s services were terminated. Kuon testified ³⁵ he felt “betrayed” as he had provided so much assistance and co-ordinated the shipment to Singapore of the steel supplied by Qingdao Co. He was then still in China ³⁶ and returned to Singapore on 4 January 2020.

48 Kuon further denied receiving an e-mail dated 16 December 2019 ³⁷ (see p 382 of Sonny’s AEIC) from a façade checker Sonny Roflo (“Roflo”) from Arup, stationed at Qingdao Co, who pointed to the fabricated steel being non-compliant with the specifications set out earlier at [39]. Thereafter, Pro-Active was back charged by Prime $11,242.23 on 30 November 2019 for Roflo’s visits in September/October 2019 for the inspection. Arup had charged Prime for Roflo’s inspection visit and in turn Prime back charged Pro-Active. Kuon disputed this back-charge ³⁸ on the basis it was never agreed to by Pro-Active. Kuon pointed out that as the installation works had been taken out of Pro-Active’s scope of works, Pro-Active should not have to bear the back charge. If there was to be inspection, the inspection should have been done in Singapore.

49 Even though Prime on Pro-Active’s behalf paid the L/C amount of $275,000 ³⁹ to Qingdao Co, Kuon initially would not admit that it was due to Pro-Active’s financial difficulties, until pressed by the court for his answer ⁴⁰ . He had further agreed that Pro-Active would pay Prime 3% commission for the issuance of the L/C in his e-mail to Prime dated 2 September 2019 ⁴¹ and yet, he disputed Prime’s claim for interest on the L/C.

50 In his AEIC, Kuon ⁴² had deposed that he purchased nuts and bolts for the roof crown works. This statement was found to be untrue when he was cross-examined ⁴³ .

51 It was said by Kuon during re-examination ⁴⁴ that the contractual completion date of 30 June 2019 kept being pushed back due to changes in drawings which necessitated the purchase of additional materials. The change in drawings (which was sometimes more than one revision) resulted in an increase of 2.5 times in tonnage of raw materials.

52 As stated earlier at [36], Prime had three witnesses. Sonny was Prime’s first witness. Nothing really turns on Sonny’s testimony. As the managing-director of Prime, he was not on site at the project unlike Andrew and Frankie although he attended site meetings either at the site office of Shimizu or at its office. However, Sonny was aware of site conditions and of Pro-Active’s work progress. He would be updated on work progress by either Andrew and/or Frankie, at site meetings and/or from correspondence exchanged between Prime and Pro-Active or between Shimizu and Prime.

53 In his AEIC ⁴⁵ , Sonny set out a chronology of Pro-Active’s work performance. He deposed that by early December 2019 it became apparent to Prime that Pro-Active did not have the manpower to carry out the installation component and the Variation Order in relation to the roof crown works. Around that time, Shimizu had already informed Prime that if those works could not be carried out according to schedule, Shimizu would take over the installation component of the roof crown works and look to Prime for all costs incurred thereby. Hence, Prime, via Andrew, issued the catch-up schedule to Pro-Active on 6 December 2019. Sonny deposed in his AEIC ⁴⁶ that on or about the same day, Shimizu informed Prime that Shimizu had no confidence in Pro-Active’s carrying out the installation component of the roof crown works. This was then followed by Shimizu’s e-mail of 13 December 2019 set out at [82] below.

54 Frankie was Prime’s second witness. He no longer works for Prime as a project director and has in fact left the construction industry altogether.

55 Frankie confirmed he telephoned Kuon on 12 December 2019 while the latter was in China to inform Kuon that Pro-Active need not do the roof crown installation works. On that day. Frankie had also flown to China after making the call to Kuon. Frankie denied Kuon’s allegation that someone from Prime had called and told Kuon the news on 27 December 2019.

56 Andrew was Prime’s third and last witness. Like Frankie, Andrew no longer works for Prime. He left Prime’s services around June 2021 ⁴⁷ .

57 During cross-examination, Andrew disclosed ⁴⁸ that Pro-Active started construction late. It should have started with the fabrication and supply of the steel columns for the roof crown on 18 July 2019 but only did so on or about 31 October 2019. Andrew recalled that Pro-Active purchased the steel materials early (by October 2019) but for reasons unknown to him, Pro-Active could not get the fabrication done before December 2019.

58 Part of the problem was due to Pro-Active’s inability to get the required steel grade (355) from China. Pro-Active then proposed an alternative steel grade (Q345B or C) which necessitated Prime’s engineer going back to the BCA for fresh approval.

59 Counsel for Pro-Active suggested to Andrew that the changes in drawings made by Prime caused Pro-Active’s delay, one example being the increase in size of the baseplates (without holes) for the trusses (see [10] above). Andrew agreed with counsel that there were other changes in the drawings but testified that those changes were minor.

60 Andrew testified that as Prime’s project manager, his issue with Pro-Active was that the latter was slow in its work – it was all due to their having insufficient manpower to carry out the contracted works. He had no issues with the quality of Pro-Active’s work. Due to Pro-Active’s inadequate manpower, its scope of works started to stack-up, resulting in delays when additional manpower was not deployed ⁴⁹ both for the contracted works as well as for the remedial works.

61 Counsel for Pro-Active had suggested to both Sonny and Andrew that if indeed Pro-Active was slow, Prime would not have requested Pro-Active to take over Yabo’s scope of works ⁵⁰ . Sonny explained that the roof trellis work was a very small piece of work, it was not part of the critical path and it would not have caused any delay ⁵¹ . Indeed, Andrew disclosed that it was Pro-Active that had requested more work in order to increase its profits. Yabo was then in charge of aluminium works in the roof trellis which work involved some element of steel works. Pro-Active requested Andrew that it be allowed to take over Yabo’s works at the roof trellis since it already had the manpower for the roof crown works. Andrew was agreeable to Pro-Active’s request provided Yabo agreed, which it did. The Variation Order alluded to at [14] ⁵² included the trellis works.

62 When the court questioned Andrew ⁵³ on Prime’s scope of works for the project, he testified it included levels 1 and 2 which steelworks were subcontracted to Pro-Active. Due to Pro-Active’s supply and installation of steel not in accordance with BCA’s approved thickness, all of the steel works installed by Pro-Active had to be dismantled and replaced, resulting in a delay of 4–5 months. By then the cladding had already been done and that too had to be torn down.

63 Before the court makes its findings, it would be appropriate at this juncture to look at the submissions put forward by the parties after the close of the trial.

64 In Pro-Active’s closing submissions ⁵⁴ , it was submitted that it would be unjust and unfair for Prime to be allowed to add the value of the entire roof crown works to the contract sum and then purport to deduct a large back charge for the same. That would mean that Pro-Active performed the entire roof crown works when Pro-Active was instructed not to (at least for the installation component).

65 Pro-Active argued that the installation component of the roof crown works must be removed or “de-scoped” from Pro-Active’s scope of works, since that component was taken over by Shimizu. That was because according to the LOA ⁵⁵ , it is a re-measurement contract. Pro-Active then made the following calculations, based on “de-scoping” the installation of the roof crown from its scope of works:

288,480kg x $2.80 per kg     $807,744.00

Payment to Qingdao via letter of credit    $765,865.00

        $ 41,879.00

Even taking into account 3% interest charged by Prime on the payment to Qingdao Co ie, $22,975.95 ($765,865.00 x 3%), a sum of $18,903.05 is still payable to Pro-Active by Prime ($41,879.00 - $22,975.95).

66 Pro-Active further submitted ⁵⁶ that as there is no extension of time clause in the LOA, time is set at large. There was also the addition of the Variation Order. Therefore, Pro-Active was required to complete the contracted works within a reasonable time as opposed to a contractually stipulated deadline. Pro-Active alleged that besides the Variation Order, Prime had engaged in acts of prevention (not specified) that caused delays in the project. It should not be allowed to take advantage of its own wrongdoing, citing Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd [1970] 1 BLR 111 (“Peak Construction”).

67 Pro-Active drew a distinction ⁵⁷ between delays caused by Pro-Active and those caused by Prime. Pro-Active alleged that there was evidence that even before the LOA was signed on 28 February 2019, Shimizu had complained of Prime’s slow progress on site. Pro-Active relied on its counsel’s cross-examination of Frankie ⁵⁸ and Shimizu’s e-mail to Prime dated 27 February 2019 ⁵⁹ . This submission is incorrect as Frankie had pointed out ⁶⁰ that Shimizu’s complaint related to the monitoring of the mock-up schedule and had nothing to do with the main scope of works.

68 Pro-Active made much of the fact ⁶¹ that there was no evidence tendered by Prime in respect of correspondence between Positive (who was Prime’s immediate main contractor ⁶² ) and Prime and between Positive and Shimizu. It argued that it was pure speculation to decipher what Positive’s stance was in respect of Shimizu’s decision to engage a third party contractor (Kong Hwee) to carry out the roof crown installation. Prime had produced Shimizu’s letter dated 18 March 2020 to Positive ⁶³ and Shimizu’s contra charge of the same date ⁶⁴ to Positive in the amount of $652,918.10. However, there was no evidence that those contra charges were back charged to Prime and there was also no privity of contract between Shimizu and Prime.

69 Pro-Active raised the possibility ⁶⁵ that Positive had reached a compromise with Shimizu in respect of Kong Hwee’s engagement and that may explain the lack of evidence in respect of Positive’s back charge to Prime for the installation cost of the roof crown. Hence, Prime has not shown it incurred the installation cost. Accordingly, Pro-Active should not be liable for such costs as it was no longer the responsibility of Pro-Active (which was also Prime’s case). ⁶⁶ Pro-Active accused Prime of being opportunistic and wrongfully withholding payment to Pro-Active. The court dismisses this argument of Pro-Active as pure speculation without any basis whatsoever.

70 Pro-Active asserted that its calculations at [20] is correct for its claim based on the fact that the roof crown works had been deducted from Pro-Active’s contracted works. Conversely, Prime’s calculations in [28]–[29] were erroneous. If the supply and fabrication components of the roof crown works were not “de-scoped” from the contracted works, it meant that Prime would still have to pay Pro-Active $41,879.00 based on the following calculations:

288,480 kg x $2.80 per kg of steel     $807,744.00

Less:

Payment to Qingdao Co     $765,865.00

For the reasons set out below at [107]–[108] and [120], the court disagrees with Pro-Active’s calculations and does not accept that the roof crown works had been “de-scoped” from the contracted works by reason of Shimizu’s decision to remove those works from Pro-Active’s contract.

71 Pro-Active had argued ⁶⁷ that whilst “de-scoping” the roof crown works may affect the heads of items that are calculated in deriving the contract sum and in calculating the sum Pro-Active is entitled to, there will not be a significant effect on the amount that is ultimately derived. That argument is misconceived as can be seen from the court’s calculations set out at [129] below.

72 Pro-Active had further submitted that Prime failed to provide reasonable notice to Pro-Active to “de-scope” the installation component of the roof crown works. Pro-Active submitted that Prime’s letter dated 6 December 2019 at [80] below was not adequate or proper notice, citing Vim Engineering Pte Ltd v Deluge Fire Protection (S.E.A.) Pte Ltd [2023] SGHC(A) 2 (“Vim’s case”).

73 Prime had listed in its closing submissions ⁶⁸ the incidents wherein Pro-Active failed to carry out the contracted works diligently as well as expeditiously ⁶⁹ . The court is of the view that the instances cited by Prime constitute breaches by Pro-Active of clause 9 of the LOA. The relevant portion of that clause headed Termination states:

74 Clause 9.1 of the LOA is reinforced by clause 3.2 which states:

Undoubtedly, when Andrew chased Pro-Active repeatedly in his numerous e-mails to increase its manpower to “catch-up” on delays to the contracted works, Prime was exercising its rights under clause 3.2 of the LOA. Unfortunately, Pro-Active failed to comply with Prime’s/Andrew’s instructions, prompting Shimizu to take back the installation component from Prime’s contract and Pro-Active’s scope of works.

75 As regards Pro-Active’s dispute on Prime’s back charges, Prime’s closing submissions ⁷⁰ referred to Pro-Active’s own progress claim no. 17 dated 25 October 2020 exhibited at pages 79–80 of Kuon’s AEIC which included Shimizu’s back charges of $384,750.00. Prime’s submissions pointed out that progress claim no. 17 also acknowledged that Pro-Active had received $1,154,191.65 in payments from Prime. Yet, in its SOC, Pro-Active stated ⁷¹ it received $822,011.15.

76 Although Kuon repeatedly stated during cross-examination that he would elaborate later on his disagreements with counsel for Prime, he did not do so in re-examination. Prime’s submissions highlighted ⁷² seven instances where Kuon failed to explain his disagreement on crucial issues.

77 The issues that require the court’s determination are:

(a) Did Pro-Active carry out the contracted works expeditiously as required under clause 9.1.1 of the LOA? If not, was the delay attributable to Pro-Active or to other factors?

(b) Did Prime serve a valid notice of termination on Pro-Active?

(c) Is Prime entitled to levy back charges on Pro-Active?

(d) What is the value of the works carried out by Pro-Active?

(e) The impact of Prime’s decision to discontinue its counterclaim.

78 The court starts by reviewing the evidence adduced for Pro-Active’s case from its only witness, Kuon.

79 The court notes that Kuon consistently disagreed with counsel for Prime on all allegations made by Prime relating to Pro-Active’s delayed and/or defective contractual works as well as the roof crown works. Even when the court conveyed to Kuon ⁷³ that Prime’s case was that Pro-Active could not do the work due to delay and other reasons and hence, Pro-Active’s services were terminated, Kuon would not agree despite the clear evidence presented to the court. This included Andrew’s oral testimony, the numerous e-mails attached to Andrew’s AEIC which included that dated 6 December 2019 ⁷⁴ as well as Andrew’s letter of notification of delay dated 31 October 2019 (and see [39] above) ⁷⁵ which he said was Prime’s “final warning”. Other instances of Pro-Active’s delay and poor workmanship are set out in Prime’s closing submissions. ⁷⁶

80 In his e-mail dated 6 December 2019, Andrew had provided a summary of Pro-Active’s manpower with Shimizu’s comments. That e-mail contained the following extracts which are telling of Pro-Active’s performance:

81 Andrew’s earlier letter of notification of delay dated 31 October 2019 ⁷⁷ addressed to Kuon could not be clearer on Pro-Active’s poor performance either. The letter is set out in full below:

82 Obviously, Prime’s “final warning” above did not have its desired effect as seen in the fact that Prime (again through Andrew) had to send his e-mail of 6 December 2019 at [81] (see also [41] above). Again, it seemed that Pro-Active’s work performance did not improve even after 6 December 2019 as Shimizu sent an e-mail dated 13 December 2019 ⁷⁸ to Prime.

83 The e-mail from Shimizu ⁷⁹ is most telling and reads as follows:

84 Notwithstanding Kuon’s repeated denials in the witness stand, there is little doubt that Pro-Active’s work was slow and behind schedule. The court does not accept his explanation (at [40] above) he did not see the need to reply to the notification of delay from Prime in [81] but chose to increase his manpower and expedite the contractual works. His testimony is untrue in any case in the light of Shimizu’s e-mail in [83] terminating the roof crown portion of Pro-Active’s scope of works. Had Kuon really deployed more and adequate manpower as Prime (and Shimizu) requested, the roof crown works as well as the trellis works, which Pro-Active took over from Yabo (see [61] above), would not have been removed from Pro-Active’s contract.

85 During cross-examination of Andrew, counsel for Pro-Active had latched onto Andrew’s e-mail at [80] and Andrew’s words “Yabo has practically got their act together & caught up to Proactive” to contend ⁸⁰ that Yabo was equally guilty of delay and failing to work diligently. Andrew pointed out that part of Yabo’s delay was due to its having to add manpower to tear down works completed by Pro-Active. ⁸¹

86 In any case, the court cannot see how any delay on Yabo’s part assists Pro-Active or exculpates its repeated delays when Yabo’s progress or lack thereof in no way impacted on Pro-Active’s scope of works. In this regard, the case of Peak Construction (see [67] above) cited in Pro-Active’s closing submissions ⁸² does not assist Pro-Active. There, one of the heads of damages in dispute was a sum for liquidated damages payable by the plaintiff main contractor to the overall employer (Peak Construction at 121). The argument made by the plaintiff main contractor was that it was liable to pay liquidated damages to the overall employer because of a 58-week delay in completion, and this delay was caused by the defendant subcontractor’s breach of its sub-contract. On the plaintiff main contractor’s case, they could recover this sum as damages from the defendant subcontractor. On appeal, the United Kingdom Court of Appeal held that the plaintiff main contractor was not liable to pay any liquidated damages for delay to the overall employer (Peak Construction at 121), and therefore cannot claim this sum as damages from the defendant sub-contractor. The court held that no liquidated damages were payable to the overall employer because the failure to complete on time was at least partly “due to the employer’s own fault or breach of contract”, and that “liquidated damages and extension of time clauses in printed forms of contract must be construed strictly contra proferentum”. Here, Pro-Active could not/did not substantiate Kuon’s allegation (see [14] above) that Prime was responsible for its delayed works. Moreover, Andrew’s testimony (see [57]–[62] above) and correspondence (see [81]–[82] above) rebutted Kuon’s allegation.

87 Prime’s entitlement to back charges from Pro-Active is found in clause 7.1 of the LOA which states:

88 Kuon had taken out from Pro-Active’s scope of works the portion relating to the installation component of the roof crown works and in so doing, he failed to give credit to Prime for the L/C payment made to Qingdao Co which was one item of Prime’s back charges to Pro-Active. Pressed by the court ⁸³ , Kuon agreed that Prime could recover the L/C sum (which had increased to $765,875.00 before GST).

89 In Pro-Active’s progress claim no 11 dated 25 February 2020 ⁸⁴ as well as in its progress claim no 17 dated 25 October 2020 ⁸⁵ , the roof crown works were still included in Pro-Active’s scope of works. Despite the court’s question to him ⁸⁶ , Kuon refused to answer whether Shimizu’s back charge to Pro-Active of $1.35 per kg totalling $222,015.60 related to installation cost for the roof crown works, even though the item appeared in Pro-Active’s own progress claim no 17 which Kuon exhibited in his AEIC ⁸⁷ . Kong Hwee apparently charged $482,000.00 for installation of the roof crown ⁸⁸ for which Prime looked to Pro-Active for recovery.

90 There was correspondence ⁸⁹ before the court which showed that Kuon requested Prime to pay invoices addressed to Pro-Active. Kuon himself had signed Pro-Active’s letter dated 27 August 2019 addressed to Prime for Frankie’s attention requesting Prime to establish the L/C in favour of Qingdao Co for $275,000.00 ⁹⁰ . Kuon asked for the L/C to be issued by 1 September 2019 and added that he would not object to Prime’s deducting the L/C amount from Pro-Active’s monthly progress claim together with interest charges incurred. Yet, Kuon denied Pro-Active was cash-strapped. Pressed to answer the court’s question ⁹¹ , Kuon eventually acknowledged that Prime was entitled to back charge Pro-Active for the payments it made on Pro-Active’s behalf.

91 Prime had also back charged Pro-Active for other items such as galvanising charges, course attendance fees paid for Pro-Active’s workers, medical fees, supply of manpower and 15% administrative charges. Kuon had disputed liability on all these items. During re-examination, Kuon clarified that administrative fees were for purchase and supply of material and equipment by Prime for Pro-Active ⁹² . He disputed liability because the charges should, but were not, discussed between the parties first. However, apart from Kuon’s bare assertion, there is no provision in the LOA that stipulates there must be a discussion between the parties before Prime can back charge Pro-Active for charges it incurred on Pro-Active’s behalf.

92 In its closing submissions (see [68]–[69] above), Pro-Active had argued that there was no evidence before the court of any back charging by Shimizu to Prime for the roof crown works carried out by Kong Hwee. It is true that Prime did not produce by way of primary evidence an invoice from Shimizu to Prime or an invoice from Kong Hwee to Shimizu for the cost incurred by Shimizu for the roof crown works. What was before the court was a contra charge ⁹³ from Shimizu to Positive dated 18 March 2020 where Prime and Kong Hwee were named as the parties on whose behalf Positive was charged by Shimizu for $652,918.10 with Kong Hwee’s charge under item 4 of $482,000.00 being for the installation of roof crown steel works including three coat system painting.

93 However, in Prime’s closing submissions ⁹⁴ , it pointed out that its claim against Pro-Active has nothing to do with the issue of privity of contract. It is based on the fact that Pro-Active is contractually obliged to pay for the installation vis-à-vis the roof crown works as long as Prime engaged another subcontractor to carry out that installation. It was not disputed that Kong Hwee did carry out those works, subject to the caveat that its appointment was done by Shimizu. Prime added that it makes no difference to Pro-Active whether Kong Hwee’s appointment was done by Shimizu or Positive or Prime as long as it was a subcontractor which was appointed to carry out the installation of the roof crown works which Pro-Active did not do.

94 It is precisely because there is no privity of contract between main contractor, subcontractors and sub-subcontractors that the construction industry coined the words ‘back charges” and came up with the practice of the main contractor(s) charging its own subcontractors for inter alia rectification of defective works, provision of manpower and materials etc which the subcontractors pass downstream to its sub-subcontractors and to the party ultimately liable for the back charge in question.

95 Kuon’s dispute of the 15% administrative charge levied by Prime is also unsustainable in the light of clause 7.1 of the LOA ⁹⁵ set out at [87] above, as well as item 40 of Appendix D to the LOA, ⁹⁶ which provides for “15% Administration charges on all materials, tools and equipment purchased by Subcontractor through Contractor”. Since Prime has a contractual right to charge a 15% administrative fee to Pro-Active, the latter’s consent is not required nor can it dispute the charge.

96 In Pro-Active’s closing submissions, it set out ⁹⁷ the invoices in Sonny’s AEIC that formed the basis for Prime’s back charges which it disputed. Pro-Active’s dispute largely related to labour that was sourced from a number of construction companies. Pro-Active’s primary objection to the invoices was that Kuon was not given prior notice of nor was there prior discussion, of those charges before they were levied.

97 As was noted at [95] and from clause 7.1 at [87] and item 40 of Appendix D to the LOA, there is no contractual provision in the LOA that obliges Prime to give prior notice of or have a prior discussion, of back charges before they were imposed either directly on Pro-Active by Prime or indirectly when back charged by Shimizu or by Positive downstream to Prime. If Prime was not given notice by the party imposing the back charges, by the same token, Pro-Active should not expect Prime to give notice when those same back charges were passed onto Pro-Active.

98 In regard to the labour back charges, Pro-Active again produced no evidence whatsoever to rebut Andrew’s evidence that it had insufficient manpower on site for the contracted works and that was why its progress was behind schedule and which prompted Shimizu to remove the roof crown from Pro-Active’s scope of works.

99 Consequently, on a balance of probabilities which is all that Prime is required to prove, the court finds that the back charges imposed by Prime on Pro-Active are legitimate or valid. As one example, the court refers to the charge for Roflo (see [48] above) of $11,242.23 (before 15% administrative charge and GST) for conducting the façade inspection at the Qingdao Co. That is clearly a legitimate charge as Roflo had to ensure the quality of the façade was in compliance with the specified standard before the material was shipped to Singapore. It was absurd of Kuon to contend (see [48] above) that any inspection should have been conducted in Singapore. That would have been too late – the quality of Qingdao Co’s materials should rightly be checked before the materials leave the factory where it was fabricated. It was equally absurd of Kuon to say that quality control was no longer Pro-Active’s responsibility. He had admitted (after considerable prevarication) that Qingdao Co was Pro-Active’s supplier ⁹⁸ . Pro-Active’s contractual obligation under the LOA included the “supply, fabrication and installation” of the roof crown. Only the “installation” component had been removed from its scope of works by Shimizu’s termination. Supply and fabrication remained its responsibility.

100 Pro-Active relied on Vim’s case to argue ⁹⁹ that it should have been given reasonable notice prior to the “de-scoping” of the roof crown installation from its scope of works. Pro-Active pointed out it received Prime’s catch-up schedule only on 6 December 2019 (see [80] above) and on 9 December 2019, Prime asserted it would look to Pro-Active for Shimizu’s contra charges for the installation costs. Pro-Active’s submission conveniently overlooked Andrew’s e-mail dated 31 October 2019 where a final warning was issued to Pro-Active (see [81] above).

101 Pro-Active also relied on Vim’s case to submit that Prime’s back charges had not been proven ¹⁰⁰ . In Vim’s case, the Appellate Division of the High Court was highly critical of the defendant Deluge for producing unreadable and/or un-decipherable documents/photographs leading the court to conclude there was woefully inadequate substantiation put forward by Deluge for its claim for substantial back charges from Vim. Was that the case here as Pro-Active submitted?

102 It would be appropriate at this juncture to quote the same helpful extract from B. R. Burrows J’s judgment in Impact Painting Ltd v Man-Shield (Alta) Construction Inc [2018] AWLD 582 that the court in Vim’s case did at [102]:

103 The court is of the view that Prime fulfilled all four requirements in this case. In regard to s/n 1, 2 and 3 in [102], by the terms of the LOA namely clauses 3.2, 5.7 (read with clause 1(b)(i) of Appendix C), 9.1 and 9.3 (see [108] above). Prime necessarily incurred the back charge(s) because of Pro-Active’s delayed works and/or omission of the roof crown works from its scope of works. For s/n 4 in [103], Andrew’s correspondence with Kuon at [80] to [81] gave notice that Pro-Active must speed up its works by deploying more manpower if it did not want to face the dire consequences.

104 Consequently, all back charges incurred by Prime that arose from Shimizu’s removal of the installation component of the roof crown works must necessarily be for Pro-Active’s account. A quick review of the back charges show (apart from labour supply to enable Pro-Active to catch up) that the items were all related to the installation of the roof crown. This would include Kong Hwee’s installation charge, the supply of stainless bolts and washers and expenses incurred for the import and galvanising of the steel materials ordered from Qingdao Co. Such expenses would include import clearance charges, unstuffing (of containers) and delivery charges for the roof crown steel support. A crane is definitely required for the roof crown installation and the court dismisses Pro-Active’s objection to the back charge of $22,078.31 in this regard as well as its objection to the charges for, amongst other things, the erection and dismantling of scaffolding for installation, amounting to $39,426.40.

105 The only items that the court does not accept as valid back charges are the medical fees incurred for Vaitilingam Padmanaban ($248.78) and Islam Anwarul ($701.28) and for the basic traffic control courses ($459.99) attended by several workers who were identified. No details or evidence were provided for these items. The total sum disallowed is $1,410.05.

106 Prime had contended that Pro-Active had admitted all but $82,809.77 of the back charges ¹⁰¹ . This was because in Prime’s Payment Response sheets to Pro-Active’s progress payment claims, Prime would deduct the back charges before setting out the sums it would and did pay, to Pro-Active (see [75] above) ¹⁰² .

107 Consequently, the court finds that Prime was entitled to back charge Pro-Active for the roof crown works that it failed to carry out, for the L/C established in favour of Qingdao Co, for other charges incurred on Pro-Active’s behalf and for all other back charges imposed by Shimizu on Positive who in turn back charged to Prime, that related to Pro-Active’s scope of works. Only the items in [105] are disallowed. The allowed back charges, which are evidenced by tax invoices billed by Prime to Pro-Active setting out the details of the back charges, ¹⁰³ total $751,699.34.

108 Pro-Active had attempted to “de-scope” and deduct the entire roof crown works from the contract sum. Prime’s closing submissions ¹⁰⁴ pointed out that there is no clause in the LOA that allows Pro-Active to de-scope such works. Prime added that Pro-Active is not even entitled to omit the installation component of the roof crown works from its scope of works as Prime has the right to engage other subcontractors to complete the work of Pro-Active and recover all incurred costs and expenses from Pro-Active. Prime relied on clause 9.3 of the LOA which states:

Clause 9.3 entitles Prime to recover by way of back charges what it expends on other subcontractors to complete Pro-Active’s contracted works or whatever sums that were back charged to Prime by Shimizu after it carried out works on behalf of Pro-Active.

109 Reliance was also placed by Prime on cl 5.7 of the LOA which states:

110 Clause 5.7 is to be read with clause 1(b)(i) of Appendix C to the LOA ¹⁰⁵ which states:

The court accepts Prime’s interpretation of the various clauses as to its right to an indemnity from Pro-Active in regard to back charges incurred arising out of Pro-Active’s scope of works and/or the omission of the installation portion of the roof crown works from its scope of works.

111 At this juncture, the court would point out that it does not believe or accept Kuon’s version of events nor his interpretation of the reduced scope of the contracted works. It is reprehensible the extent to which Kuon would go, to deny or dispute facts despite overwhelming evidence. The court cites as an example his denial that Pro-Active was in financial difficulties (see [49] above) ¹⁰⁶ despite his own letter on behalf of Pro-Active to Prime dated 27 August 2019 requesting Prime to establish the L/C in favour of Qingdao Co (see [90] above).

112 Another instance of Kuon’s refusal to admit the obvious was his disavowal of the Variation Order on the basis that he did not sign the document ¹⁰⁷ even though the document contained the additional steel works at the trellis area that Pro-Active requested to, and did, take over from Yabo. Andrew had testified (which evidence the court accepts) that Pro-Active requested to do the work in order to increase its profits (see [61] above). A third instance of Kuon’s untruthful evidence relates to back charges set out earlier as well as his claim that he had purchased nuts and bolts for the roof crown works (see [50] above).

113 The court prefers the testimony of Frankie and Andrew as they were more credible witnesses. Their evidence was consistent with the documentary evidence that was before the court. Both persons no longer work for Prime and they have no reason not to speak the truth or to recall events as they actually happened.

114 The court moves next to the issue of whether and when Pro-Active/Kuon was given notice of Shimizu’s notice of termination in [83]. In his AEIC ¹⁰⁸ as well as in his oral testimony ¹⁰⁹ , Andrew stated that he had forwarded to Kuon Shimizu’s notice of termination. In cross-examination he candidly acknowledged there was a possibility he did not forward the e-mail, Unfortunately, Andrew was unable to locate and produce the forwarded copy for the court. Kuon not surprisingly denied receiving notification of Shimizu’s notice of termination ¹¹⁰ .

115 In Frankie’s AEIC ¹¹¹ as well as in his oral testimony, he had stated that he was very certain he had made a phone call to Kuon ¹¹² around midnight of 12 November 2019 or in the early hours of 13 December 2019 to convey to the latter that Shimizu no longer required Pro-Active to do the roof crown works. He was then at Changi Airport waiting for his flight to Qingdao to take off. Frankie recalled that his flight was scheduled to depart at 1.55am on 13 December 2019 but it was delayed until 5.15am. He arrived at Changi Airport at around 11.30pm on 12 December 2019 and decided to call Kuon who was then already in China. Besides being Prime’s subcontractor, Frankie disclosed that Kuon was also his then neighbour and he recalled clearly that Kuon’s wife had then asked Frankie to bring some of Kuon’s belongings to the latter in China which he did.

116 Assuming arguendo, that Andrew did not forward Shimizu’s e-mail in [83] to Kuon (who denied receiving any such e-mail) or that Kuon did not receive the forwarded e-mail (because he said he could only receive e-mails sent to certain domain names whilst in China ¹¹³ ) the court finds that Frankie did telephone Kuon on 12 December 2019 to inform him of Shimizu’s decision while Frankie was at Changi Airport waiting for his flight to Qingdao.

117 Contrary to Pro-Active’s closing submissions ¹¹⁴ , Kuon’s version of when he was notified of Pro-Active’s termination is neither credible nor corroborated by documentary evidence. The court finds it highly implausible that Prime would not immediately notify Pro-Active/Kuon of Shimizu’s decision to remove the installation component of the roof crown works from Pro-Active’s scope of works. Andrew more likely than not forwarded to Kuon Shimizu’s e-mail in [83] once Prime received it while Frankie orally informed Kuon of Shimizu’s decision on the same night. Moreover, in his own AEIC, Kuon had deposed ¹¹⁵ that in Prime’s e-mail dated 5 September 2019 (see [38] above), Prime had mentioned that Shimizu had considered revoking the roof crown works if not for the fact that Prime had already purchased the necessary steel. Kuon was fully aware of Shimizu’s dissatisfaction with Pro-Active’s slow progress and the real possibility of Pro-Active’s services being terminated.

118 In this regard, the court rejects as untrue Kuon’s evidence ¹¹⁶ that he received official notice from Prime only on 27 December 2019, that Pro-Active had been taken off the roof crown works. Kuon should not have been surprised by Shimizu’s decision in the light of the many e-mails he previously received from Andrew warning him of what would happen if Pro-Active did not increase the manpower it deployed and accelerate the contracted works.

119 Kuon’s excuse that he was in China between 13 and 27 December 2019 does not mean that he did not know of Shimizu’s decision in view of its past unhappiness with Pro-Active’s pace of work. Moreover, he himself revealed he could receive e-mails sent to his yahoo account in China ¹¹⁷ .

120 The court is of the view that pursuant to Andrew’s letter of notification dated 31 October 2019 set out at earlier at [81], Pro-Active had been issued a “final warning” by Prime. Despite that final warning, Pro-Active’s rate of progress did not improve prompting Shimizu to terminate Prime’s contract and Prime in turn to validly terminate Pro-Active’s contract for the roof crown works.

121 It was during his re-examination ¹¹⁸ where Kuon attempted to shirk Pro-Active’s obligations and shift to Prime the responsibility for the fabrication and supply of the steel materials, claiming Pro-Active’s role was only that of a co-ordinator between Prime and Qingdao Co. It was even more absurd of Kuon to suggest ¹¹⁹ that Qingdao Co took over fabrication and installation of the roof crown works.

122 Pro-Active’s contractual obligation under the LOA was the supply, fabrication and installation of steel works ¹²⁰ . Due to its financial constraints, it did not have the means to pay Qingdao Co and approached Prime for assistance. The fact that Prime paid Qingdao Co on Pro-active’s behalf does not ipso facto place on Prime the responsibility for the supply and fabrication of the steel needed for the roof crown works. That remained the responsibility of Pro-Active. Consequently, the court rejects Pro-Active’s argument that the roof crown works had been de-scoped from its scope of works.

123  Pro-Active cannot unilaterally remove and deduct the roof crown works from its scope of works as Kuon attempted to do in the SOC. Consequently, Pro-Active’s computation in [20] is incorrect.

124 In Pro-Active’s closing submissions ¹²¹ , it had set out in the table below its computation of the reduced sum of $260,615.68 due to Pro-Active should the court be of the view that the roof crown works were not de-scoped from Pro-Active’s scope of works:

* The correct figure should be $22,976.25

125 If the installation component in Pro-Active’s contracted works, which was quantified as $370,500.55 ¹²² , was used in place of Kong Hwee’s installation charge of $582,483.66, Pro-Active submitted it should be paid $522,018.66 (before GST) or the claim ($558,559.97) after GST. The court does not accept either $260,615.68 or the claim amount as being due to Pro-Active.

126 In its closing submissions (see [68]–[69] above), Pro-Active had further argued that there was no evidence before the court of any back charging by Shimizu to Prime for the roof crown works carried out by Kong Hwee. It is true that Prime did not produce by way of primary evidence an invoice from Shimizu to Prime or an invoice from Kong Hwee to Shimizu for the cost incurred by Shimizu for the roof crown works. What was before the court was a contra charge ¹²³ from Shimizu to Positive dated 18 March 2020 where Prime and Kong Hwee were named as the parties on whose behalf Positive was charged by Shimizu for $652,918.10 with Kong Hwee’s charge under item 4 of $482,000.00 being for the installation of roof crown steel works including three coat system painting.

127 In Prime’s closing submissions ¹²⁴ , it pointed out that its claim against Pro-Active has nothing to do with the issue of privity of contract. It is based on the fact that Pro-Active needed to pay for the installation vis-à-vis the roof crown works as long as Prime engaged another subcontractor to carry out that installation. It was not disputed that Kong Hwee did carry out those works, subject to the caveat that its appointment was done by Shimizu. Prime added that it makes no difference to Pro-Active whether Kong Hwee’s appointment was done by Shimizu or Positive or Prime as long as it was a subcontractor which was appointed to carry out the installation of the roof crown works which Pro-Active did not do.

128 It is precisely because there is no privity of contract between main and subcontractors that the construction industry coined the words “back charges” and came up with the practice of the main contractor(s) charging its subcontractors for inter alia rectification of defective works, provision of manpower and materials etc which the subcontractors pass down the line to sub-subcontractors and to the party ultimately liable for the back charge in question.

129 The correct computation for Pro-Active’s claim and/or the work it carried out is set out in the table below:

*The revised contract sum was accepted by both parties against the original figure in the LOA of $1,161,204.58.

130 In the Defence component of its D&CC (see [30] above), Prime had claimed $93,976.08 ¹²⁵ (inclusive of GST) from Pro-Active. In addition, in the Counterclaim component of its D&CC, Prime had counterclaimed liquidated damages of $90,450.92 for Pro-Active’s delay of 36 days in completing the contracted works on 4 January 2020 instead of on 29 November 2019 ¹²⁶ . If the counterclaimed sum is set off against the balance of $179,151.04 the court finds is due to Pro-Active, the remaining sum due to Pro-Active is $88,700.12 ($179,151.04 - $90,450.92).

131 In its opening statement and in its closing submissions, Prime indicated it intended to withdraw its counterclaim for liquidated damages.

132 However, in its closing submissions ¹²⁷ , Pro-Active reserved its rights to seek costs from Prime for the late withdrawal of its counterclaim as well as the wasted hearing date of 9 December 2022 due to Andrew’s unavailability to attend court that day.

133 Undoubtedly, a party that withdraws its clam or counterclaim at the eleventh hour is liable to pay costs to the other party. Should an exception be made in this case? The court is of the view that the evidence adduced in court would have likely supported a finding in favour of Prime of liability on Pro-Active’s part for liquidated damages as there was undoubtedly a delay in completion of the contracted works, even before the roof crown works were removed from Pro-Active’s scope of works. However, because of Prime’s intention not to pursue its counterclaim, no evidence was led in that regard other than the computation for liquidated damages set out in the D&CC (see also [30] above) ¹²⁸ .

134 Consequently, the withdrawal of Prime’s counterclaim was not because its claim for liquidated damages was unfounded. That being the case, there should only be nominal costs awarded to Pro-Active for the withdrawal of Prime’s counterclaim which the court fixes at $3,000 plus another $2,000 for the wasted hearing day of 9 December 2022.

135 Pro-Active on the other hand has not proven its claim. Instead of $558,559.97 (see [20] above), Pro-Active is only entitled to the sum of $179,151.04. It fails in its claim for the claim amount of $558,559.97 or $260,615.68 (see para [125] above).

136 Accordingly, the court awards judgment to Pro-Active in the sum of $179,151.04 together with interest at 5.33% per annum from the date of the writ (6 November 2021) until payment. Costs to Pro-Active are on the State/District Courts scale in view of the judgment sum awarded being below the jurisdiction of the High Court. The sum of $5,000 awarded to Pro-Active in [134] should be added to the costs here which are to be taxed on the State Courts scale unless otherwise agreed.