Introduction
The brief summary of Lim Kim Huat Building Construction Pte Ltd v. LBD Engineering Pte Ltd [2026] SGHC 28 (“Lim Kim Huat”) is as follows.
The Claimant was the sub-contractor to the Defendant in a building project. The Claimant brought adjudication proceedings against the Defendant and obtained a determination under the Building and Construction Industry Security of Payment Act 2004 (“SOP Act”) and subsequently secured an enforcement order to enforce the adjudication determination against the Defendant.
The Defendant did not pay the judgment sum and filed the following three applications: (a) an application for an extension of time to file its application to set aside the enforcement order; (b) an application to set aside the enforcement order; and (c) an application for a stay of enforcement of the enforcement order pending the final determination of the setting-aside application. It therefore necessarily follows that the latter two applications are contingent on the success of the first application.
The Court denied the first application and dismissed the other two. Its decision provides important lessons for parties seeking to challenge the enforcement of adjudication determinations.
Timelines under the Rules of Court 2021 for setting-aside application
Under Order 36 Rule 2(4) of the Singapore Rules of Court 2021 (“ROC 2021”), a setting-aside application of an adjudication determination must be filed within 14 days after service of an enforcement order. It was found, on the facts, that the Defendant was late in filing its setting-aside application by a single day and that its application for an extension of time therefore needed to be granted in order for its setting-aside application and substantive application to be heard.
Extension of time
There are four recognised factors under Singapore law for granting an extension of time: (a) the length of the delay; (b) the reasons for the delay; (c) the merits of the substantive application; and (d) any prejudice to the other side. (1)
Whilst the Court agreed that a one-day delay was a short delay (however not de minimis when compared to the 14-day period for applying of the setting-aside application), there were no explanations offered or received as to the reasons for delay. (2)
The Court also found, for the reasons discussed below, that the merits of the substantive application were hopeless and accordingly dismissed the Defendant’s application for an extension of time.
Application to set aside the adjudication determination and the temporary finality of adjudication determinations
The Court’s view that the substantive application was hopeless was based firstly on the Defendant’s failure to pay into court as security, the unpaid portion of the adjudicated amount that an applicant is required to pay at the time of filing the application. (3) Further, and in any case, the Court held that there was no basis to set aside the enforcement order.
The Defendant sought to defend its failure to provide the requisite security, arguing that it did not seek to set aside, stay, or vary the adjudication determination itself, but was only applying to set aside the enforcement order in respect of the adjudication determination.
The Court rejected this argument on the basis that regardless of the form of the applications from which challenges against adjudication determinations are brought, challenges against adjudication determinations must be regarded as being effectively setting-aside applications governed by Section 27(5) of the SOP Act. (4) The Defendant’s application should accordingly be regarded as an application to set aside the adjudication determination within Section 27(5) of the SOP Act. The requisite security therefore needed to have been paid by the Defendant at the time it filed the setting-aside application. The Court affirmed that the requirement for provision of security under Section 27(5) of the SOP Act is a strict one, and as such, the Defendant’s failure to provide security justified dismissal of the application. (5)
In any case, it is well recognised under Singapore case law that section 21(1) of the SOP Act confers temporary finality on adjudication determinations. (6) An adjudication determination is binding on the parties to the adjudication unless or until the court refuses to grant permission to enforce it; the dispute is finally determined by a court or tribunal or in any other dispute resolution proceedings; or the dispute is settled by agreement. (7)
The Defendant’s argument that the principle of temporary finality meant that the court should not permit adjudication determination to be enforced but should instead leave the parties to proceed to a final determination of their dispute and in the meantime the Defendant need not pay anything on the adjudication determination (8) was firmly rejected as being completely contrary to the concept of temporary finality under the SOP Act and the authorities. (9)
The Court held that if the Defendant were correct, no adjudication determination could ever be enforced. Section 27 of the SOP Act allows adjudication determinations, with the permission of the court, to be enforced in the same manner as a judgment or an order of the court to the same effect.
The Court reaffirmed that the statutory regime is based on the principle of ‘pay now, argue later’, which requires the respondent to pay the adjudicated amount within prescribed time periods. (10) What the Defendant was left with was a disputed and unadjudicated cross-claim, and this was not a basis on which an enforcement order can be set aside. (11)
Key takeaways
1. The decision in Lim Kim Huat highlights the strict procedural requirements for setting-aside applications under the SOP Act and the ROC 2021. Failure to comply with these requirements will result in dismissal of the application.
2. The Court reaffirmed the principle of ‘pay now, argue later’ and the temporary finality of adjudication determinations under the SOP Act. Parties cannot avoid payment by relying on disputed or unadjudicated cross-claims, and courts will not allow the enforcement of an adjudication determination to be challenged on this basis.
References
1. Lim Kim Huat at [17].
2. Lim Kim Huat at [18].
3. Lim Kim Huat at [23]-[33]; Section 27(5) of the SOP Act read with Order 36 Rule 3(2) of the ROC 2021.
4. Lau Fook Hoong Adam v GTH Engineering & Construction Pte Ltd [2015] 4 SLR 615 at [29].
5. Lim Kim Huat at [33] and Lau Fook Hoong Adam v GTH Engineering & Construction Pte Ltd [2015] 4 SLR 615 at [27] and [31].
6. Lim Kim Huat at [36].
7. Section 21(1) of the SOP Act.
8. Lim Kim Huat at [38].
9. Lim Kim Huat at [39].
10. See Sections 22, 18(3) and 27(5) of the SOP Act.
11. AES Façade Pte Ltd v WYSE Pte Ltd [2017] 5 SLR 640 at [34]-[73]; and Lim Kim Huat at [45].
