27 September 2018

On 10 September 2018, the Building and Construction Industry Security of Payment (Amendment) Bill (“Bill”) was introduced in Parliament. Generally, the Bill seeks to improve the administration of the Building and Construction Industry Security of Payment Act (“SOPA”) and proceedings under the SOPA.

Key features of the Bill

This article highlights the features of the Bill that are anticipated to have a practical impact on businesses’ day to day contract administration.

Payment claim

  • Introducing the term “unpaid payment claim” and providing that nothing in section 10(1) of the SOPA prevents the claimant from serving an unpaid payment claim in accordance with section 10(2) of the SOPA.
  • Imposing a new 30-month limitation period for the service of a payment claim.
  • Enabling a payment claim to be served before the due date, and specifying when a payment claim that is served before the due date is deemed to have been served.
  • Providing a new definition of “patent error” in relation to a payment claim based on the decision of the Singapore Court of Appeal in Comfort Management Pte Ltd v OGSP Engineering Pte Ltd [2018] SGCA 19, i.e. an error that is obvious, manifest or otherwise easily recognisable on the face of the claim.

Payment response

  • Increasing the amount of time for a respondent to provide a payment response from 7 to 14 days after the payment claim is served under section 10 of the SOPA, where the construction contract does not provide for the response time.

Adjudication response

  • Providing that only in the following specified circumstances may a respondent, in the case of a construction contract, include in the adjudication response any objection that was not included in the relevant payment response: (1) the circumstances of the objection only arose after the respondent provided the relevant payment response to the claimant; and (2) the respondent could not reasonably have known of the circumstances when providing the payment response to the claimant.
  • Providing that only in the following specified circumstances may a respondent, in the case of a supply contract, include in the adjudication response any objection that was not raised to the claimant in writing on or before the relevant due date: (1) the circumstances of the objection only arose after the respondent provided the relevant due date; and (2) the respondent could not reasonably have known of the circumstances by the relevant date.

Adjudicator’s determination 

  • Preventing the adjudicator from considering any objection from the respondent of any nature that was not included in the adjudication response unless: (1) the circumstances of the objection only arose after the respondent lodged the adjudication response with the authorised nominating body; (2) the respondent could not reasonably have known of those circumstances when lodging the adjudication response with the authorised nominating body; and (3) the objection relates to a patent error.

Adjudication review application 

  • Enabling a claimant to make an application for the review of an adjudication determination where the claimed amount exceeds the adjudicated amount by the prescribed amount or more.
  • Providing that any adjudicated amount that a respondent is required to pay in consequence of an adjudication determination must be paid to an authorised nominating body, so as to safeguard the same pending the outcome of an adjudication review application brought by the respondent.
  • Preventing the review adjudicator from considering any objection from the respondent of any nature that was not included in the adjudication response unless: (1) the circumstances of the objection only arose after the respondent lodged the adjudication response with the authorised nominating body; (2) the respondent could not reasonably have known of those circumstances when lodging the adjudication response with the authorised nominating body; and (3) the objection relates to a patent error.

Setting aside an adjudication determination

  • Specifying a non‑exhaustive list of grounds on which a party to an adjudication may commence proceedings to set aside the adjudication determination.
  • Preventing a respondent from commencing setting aside proceedings on any ground if the objection to support that ground was not included in the respondent’s adjudication response unless: (1) the circumstances of the objection only arose after the respondent lodged the adjudication response with the authorised nominating body; (2) the respondent could not reasonably have known of those circumstances when lodging the adjudication response with the authorised nominating body.

MND and BCA’s response to feedback from public consultation 

On 10 September 2018, the Ministry of National Development (“MND”) and the Building and Construction Authority (“BCA”) also released their response to feedback received from their public consultation on proposed amendments to the SOPA. The consultation ran from 8 to 29 June 2018.

In a press release, MND and BCA highlighted that the proposed amendments and responses should not be used for decisions made by contractual parties, adjudicators or the authorised nominating body as they do not represent the final legislation.

Reference materials

The following materials are available on the Parliament website www.parliament.gov.sg and the BCA website www.bca.gov.sg:

 

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