Ten-League Engineering & Technology Pte Ltd and another v Precise Development Pte Ltd and another  SGHC 317 (“Ten League”)
Direct Payment Agreements: Tread Carefully
The main contractor engages a sub-contractor. The sub-contractor engages a sub-sub-contractor.
This is a typical contractual framework in construction projects. In this arrangement, there’s no privity of contract between the main contractor and the sub-sub-contractor.
The main contractor has a agreement (“the Sub-Contract”) with its sub-contractor, and the sub-contractor has a separate contract with its sub-sub-contractor. (“the Sub-Sub-Contract”).
Progress payments will flow from the main contractor to the sub-contractor under the Sub-Contract, and from the sub-contractor to its sub-sub-contractor under the Sub-Sub-Contract. The sub-sub-contractor has no recourse against the main contractor if the sub-contractor fails to make payments under the Sub-Sub-Contract.
In certain situations, such as when the sub-sub-contractor loses faith in the sub-contractor’s ability to make regular payments, the sub-sub-contractor may seek to get its payment directly from the main contractor. This can be achieved by the three parties entering into collateral tri-partite contract.
The case of Ten League was premised on an alleged four-party agreement for direct payment which for reasons explained below was found not to exist.
The Parties in Ten League.
The main contractor was Precise Development Pte Ltd (“Precise”).
The sub-contractor was G-Con Foundation Pte Ltd (“G-Con”).
G-Con rented machinery and equipment from Ten-League Engineering & Technology Pte Ltd (“TLET”)
TLET was a fully-owned subsidiary of Ten-League Corporations Pte Ltd (“TLC”)
Choo Lye Weng (“Mr Choo”) was the sole Director and Shareholder of G-Con.
Great to see the easing of Covid-19 measures. It certainly feels odd to amble around without a face mask. I’m sure that soon the arduous pandemic years will be but a faint memory.
But I digress.
This is a short note to inform that I am presenting a two-day course on the Singapore Public Sector Standard Conditions of Contract (PSSOC) at the BCA Academy on 21 and 22 April 2022. The PSSCOC is the usual standard form of contract used in public sector construction projects.
The brochure for the course and registration details can found at this link
Tan Joo Seng
30 March 2022
A very Happy Lunar New Year to everyone in this year of the water Tiger.
2020 to 2021 were difficult, uncertain, and stressful times – no thanks to a microscopic, miniscule organism - SARS-Cov-2.
The tiger is known as the king of all beasts in China. The zodiac sign tiger is a symbol of strength, exorcising evils, and braveness.
Let’s hope that the tiger knocks out SARS-Cov-2 and we can all return to normality.
Wishing everyone a healthy, happy and prosperous year of the Tiger.
Tan Joo Seng
2 Feb 2022
This section of my website contains summaries and commentaries of judgments and other developments relevant to infrastructure, construction, engineering and construction law. .
The information is provided for information only. It should not be relied on or taken as legal advice.