Legislations 

Supreme Court of Judicature (Amendment) Act 2004 (A36/2004)

The Supreme Court of Judicature Act (‘SCJA’) (Cap 322) will be amended to empower the Chief Justice, when making any order for the allocation of proceedings to the District Court under the section, to also make such provision governing appeals relating to such proceedings as he thinks fit, including provisions restricting the right of appeal. The SCJA has also been amended to:

•     bar the bringing of appeals to the Court of Appeal from any order made by the High Court in the exercise of its appellate jurisdiction, with respect to any proceedings under the Adoption of Children Act (Cap 4) and Parts VII, VIII and IX of the Women’s Charter (Cap 353), unless the Court of Appeal or a Judge grants leave for the bringing of any such appeal; and

•     provide that the minimum monetary limit of $250,000 does not apply to any appeal from any order made by the High Court in the exercise of its original jurisdiction under s 17A of the Act or under s 59 and Part X of the Women’s Charter.

The changes are not in force yet.

Business Trusts Act (Commencement) Notification 2004 (S628/2004) and the Securities and Futures (Amendment) Act (Commencement) Notification 2004 (S629/2004)

The Business Trusts Act 2004 (A30/2004) (‘BTA’) and the Securities and Futures (Amendment) Act 2004 (A31/2004) have come into force from 12 October 2004.

Both Acts were introduced in Parliament on 20 July 2004 and passed on 2 September 2004.

The BTA is a new piece of legislation, which regulates the governance of business trusts (‘BTs’). BTs are business enterprises set up as a trust structure, as opposed to a corporate structure. They are essentially hybrid structures with elements of both companies and trusts.

The Securities and Futures (Amendment) Act 2004 amends the Securities and Futures Act (Cap 289) to provide for the regulation of offers of units and derivatives of units in BTs and take-over proceedings in relation to BTs, and to deal with the treatment of property trusts.

Hire-Purchase (Amendment) Act (Commencement) Notification 2004 (S606/2004)

Pursuant to the Hire-Purchase (Amendment) Act (A38/2004), the Hire-Purchase Act (Cap 125) is amended with effect from 1 November 2004 to:

•     enhance disclosure and transparency requirements so that consumers have access to all material and relevant information to make an informed choice when deciding whether to enter into a hire-purchase agreement; and

•     update the Act in a manner which balances the needs and concerns of consumers and hire-purchase financiers and facilitates market developments.

Building and Construction Industry Security of Payment Bill 2004 (B54/2004)

The Building and Construction Industry Security of Payment Bill 2004 (B54/2004) (‘Bill’ or ‘BCISPB’) was introduced in Parliament on 19 October 2004.

The Bill will confer a statutory entitlement to payment on any person who has carried out construction work or supplied goods or services under a construction contract or supply contract (‘contract’). The Bill will also provide for the due date for progress payments even where a construction contract or supply contract does not provide for one. Further, the Bill will render unenforceable a ‘pay when paid’ clause in a construction contract or supply contract.

In addition, the Bill will establish an adjudication framework by which a person may claim payments due under a contract and enforce payment of the adjudicated amount.

Application of the BCISPB

When in force, the BCISPB will apply to any written contract on or after the date of commencement of the Bill, whether or not the contract is expressed to be governed by the law of Singapore.

However, the following will be excluded from the application of the Bill:

•     any contract for the carrying out of construction work at or on, or the supply of goods or services in relation to, any residential property which does not require the approval of the Commissioner of Building Control under the Building Control Act (Cap 29);

•     any contract to the extent that a party agrees to carry out construction work, or supply goods or services, as an employee (within the meaning of the Employment Act (Cap 91)) of the party for whom the construction work is to be carried out or for whom the goods or services are to be supplied;

•     any contract to the extent that it deals with construction work carried out outside Singapore, or goods or services supplied in relation to construction work carried out outside Singapore; and

•     such contract or class of contracts as may be prescribed.

A contract will be treated as being made in writing if:

•     the contract is made in writing, whether or not it is signed by the parties thereto;

•     the contract is made by an exchange of communications in writing;

•     the contract made otherwise than in writing is recorded by one of the parties thereto, or by a third party, with the authority of the parties thereto; or

•     the parties to the contract agree otherwise than in writing by reference to terms which are in writing.

No contracting out

The provisions of this Bill will have effect notwithstanding any provision to the contrary in any contract or agreement.

The Bill renders void the following provisions in any contract or agreement, whether or not in writing:

•     a provision under which the operation of this Bill or any part thereof is, or is purported to be, excluded, modified, restricted or in any way prejudiced, or that has the effect of excluding, modifying, restricting or prejudicing the operation of this Bill or any part thereof;

•     a provision that may reasonably be construed as an attempt to deter a person from taking action under this Bill.

Statutory rights to progress payments

Under the Bill, any person who has carried out any construction work, or supplied any goods or services, under a contract is entitled to a progress payment.

The amount of a progress payment to which a person is entitled under a contract will either be the amount calculated in accordance with the terms of the contract, or, if the contract does not so provide, the amount calculated on the basis of the value of the construction work carried out, or the goods or services supplied, by the person under the contract.

Due date for payment

Construction contract

The Bill provides that where a construction contract provides for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable on the earlier of the following dates:

•     the date as specified in or determined in accordance with the terms of the contract; or

•     the date immediately upon the expiry of 35 days after:

(i)   if the claimant is a taxable person under the Goods and Services Tax Act (‘GST Act’) (Cap 117A) who has submitted to the respondent a tax invoice for the progress payment, the date the tax invoice is submitted to the respondent; or

(ii)  in any other case, the date on which or the period within which the payment response is required to be provided under the Bill (whether or not a payment response is provided).

Where a construction contract does not provide for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable immediately upon the expiry of 14 days after:

•     if the claimant is a taxable person under the GST Act who has submitted to the respondent a tax invoice for the progress payment, the date the tax invoice is submitted to the respondent; or

•     in any other case, the date on which or the period within which the payment response is required to be provided in accordance with the provisions of the Bill (whether or not a payment response is provided).

Supply contract

Where a supply contract provides for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable on the earlier of the following dates:

•     the date as specified in or determined in accordance with the terms of the contract; or

•     the date immediately upon the expiry of 60 days after the relevant payment claim is served in accordance with the provisions of the Bill.

Where a supply contract does not provide for the date on which a progress payment becomes due and payable, the progress payment becomes due and payable immediately upon the expiry of 30 days after the relevant payment claim is served in accordance with the provisions of 
the Bill.

‘Pay when paid’ provisions to be unenforceable

A pay when paid provision of a contract is unenforceable and has no effect in relation to any payment for construction work carried out or undertaken to be carried out, or for goods or services supplied or undertaken to be supplied, under the contract.

A ‘pay when paid provision’ refers to a provision of the contract by whatever name called:

•     that makes the liability of one party (the ‘first party’) to pay money owing to another party (the ‘second party’) contingent or conditional on payment to the first party by a further party (the ‘third party’) of the whole or any part of that money;

•     that makes the due date for payment of money owing by the first party to the second party contingent or conditional on the date on which payment of the whole or any part of that money is made to the first party by the third party;

•     that otherwise makes the liability to pay money owing, or the due date for payment of money owing, contingent or conditional on the operation of any other contract or agreement; or

•     that is of such kind as may be prescribed.

Adjudication framework and enforcement of adjudicated claims

The Bill will establish an adjudication framework by which a person may claim payments due under a contract and enforce payment of the adjudicated amount.

The Bill proposes a system of payment claims and payment responses and will prescribe time frames within which payment claims and payment responses may be made. A claimant under a contract who fails to receive payment by the due date of the claimed amount is entitled to make an adjudication application for the claimed amount.

The Bill sets out the steps to be taken towards adjudication of payment claims disputes. The process begins with the claimant lodging the adjudication application with an authorised nominating body. The authorised nominating body will refer the claim to a person who is on the register of adjudicators established under the Bill and whom the authorised nominating body considers to be appropriate for appointment as the adjudicator to determine the adjudication application. The process of adjudication will take place in accordance with the provisions of the Bill.

The Bill also provides for measures to enforce payment of the adjudication amount. These include:

•     enforcement of the adjudicated amount as a judgment debt;

•     direct payment from the principal of the respondent;

•     lien on goods supplied that are unfixed and which have not been paid for; and

•     right to suspend work or supply.

Elizabeth Wong

Allen & Gledhill