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vii

TABLE OF CONTENTS

CHAPTER

TITLE DECLARATION DEDICATION ACKNOWLEDGEMENTS ABSTRACT ABSTRAK TABLE OF CONTENTS LIST OF TABLES LIST OF ABBREVIATIONS LIST OF CASES

PAGE ii iii iv v vi vii xi xii xiv

1.0

INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.6 Background Studies Problem Statement Objective of the Research Scope of the Research Importance of the Research Research Methodology 1 3 8 8 8 9

viii 2.0 PAYMENTS IN THE CONSTRUCTION INDUSTRY 2.1 2.2 Introduction The Right to Payment 2.2.1 Lump Sum Contract 2.2.1.1 Entire Contracts 2.2.1.2 Substantial Performance 2.2.1.3 Non-Completion 2.2.2 2.2.3 2.3 2.4 Contract other than for a Lump Sum Contract Quantum Meruit 10 11 12 13 15 15 16 17 18 19 19 19 20 20 21

Arrangements for Interim Payment Mode of Payment 2.4.1 2.4.2 2.4.3 2.4.4 Payment in Cash Payment in Bills Payment in Debentures or Shares Payment in Land

2.5

Conclusion

3.0

REPUDIATORY BREACH IN CONSTRUCTION CONTRACT 3.1 3.2 Introduction Common Law Termination 3.2.1 3.2.2 3.2.3 3.2.4 3.3 3.4 Discharged by Performance Discharged by Agreement Discharged by Frustration Discharged by Repudiation 22 24 25 26 27 28 29 30 31 32 33 35 35 37 39

Contractual Termination Repudiatory Breach 3.4.1 Repudiation 3.4.1.1 Intention to Repudiate 3.4.1.2 Misapprehension of Contract Obligations 3.4.2 Fundamental Breach 3.4.2.1 General Principles 3.4.2.2 Rule of Construction 3.4.2.3 Onus of Proof

ix 3.4.3 Breach of Fundamental Terms 3.4.3.1 By Statutory Implication 3.4.3.2 Because the Parties have explicitly made it so 3.4.3.3 Because the Court so Construes it 3.4.4 3.4.5 3.4.6 3.5 Non-Fundamental Breaches after Notice Erroneous Expression of View Arbitration Agreements 41 41 42 43 44 44 45 39 41

Recourse for Repudiation and Fundamental Breach 3.5.1 3.5.2 Innocent Party Elects to Terminate the Contract Innocent Party Elects to Treat the Contract as Continuing

47 47 48 49 50 51 53 54 55 55 56

3.6

Grounds of Termination by the Contractor 3.6.1 3.6.2 3.6.3 3.6.4 3.6.5 3.6.6 3.6.7 3.6.8 Employers Refusal to be bound Preventing Execution of Works Failure to Give Possession of the Site Failure to Pay Under-Certification of Payments No General Right to Suspend Work Interference or Influence of Certifier Other Breaches

3.7

Conclusion

4.0

CIRCUMSTANCES WHERE NON-PAYMENT IS / IS NOT A REPUDIATORY BREACH BY THE EMPLOYER 4.1 4.2 Introduction Circumstances Where Non-Payment by an Employer Constituted a Repudiatory Breach of Contract 4.2.1 4.2.2 4.3 Circumstance 1 Circumstance 2 60 61 64 58

Circumstances Where Non-Payment by an Employer Did not Constitute a Repudiatory Breach of Contract 4.3.1 Circumstance 1 67 68

x 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.4 Circumstance 2 Circumstance 3 Circumstance 4 Circumstance 5 Circumstance 6 77 83 86 89 92 95

Conclusion

5.0

CONCLUSIONS AND RECOMMENDATIONS 5.1 5.2 5.3 5.4 Introduction Summary of Research Findings Problems Encountered during Research Further Studies 97 97 103 104

REFERENCE BIBLIOGRAPHY

105 107

xi

LIST OF TABLES

TABLE NO TITLE

PAGE

5.1

Circumstances where non-payment constituted a repudiation of contract by the employer 98

5.2

Circumstances where non-payment did not amount to repudiation of contract by the employer / purchaser 99

xii

LIST OF ABBREVIATIONS

AC All ER ALJ ALR ALJR App Cas B B&S Build LR CA CB Ch Ch App Ch D CIDB CLD DC Const LJ Const LR CP CPD DLR Exch Eq EWHC

Law Reports Appeal Case All England Law Reports Australian Law Journal Australian Law Reports Australian Law Journal Reports Appeal Cases Beavan Best and Smiths Reports Building Law Reports Court of Appeal Common Bench Reports Chancery Chancery Appeal The Law Reports, Chancery Division Construction Industry Development Board Construction Law Digest Divisional Court, England Construction Law Journal Construction Law Reports Law Reports, Common Pleas Law Reports, Common Pleas Division Dominion Law Reports Exchequer Reports Equity Case High Court of England and Wales Decisions

xiii FC F&F H&N HL HKC HKLR IR JKR KB LGR LJKB (QB) Lloyds Rep LR LT JP MLJ NZLR PAM PWD PD QB TCC SLR WLR WR Federal Court Foster & Finlaysons Reports Hurlstone & Normans Exchequer Reports House of Lords Hong Kong Cases Hong Kong Law Reports Irish Reports Jabatan Kerja Raya King Bench Local Government Reports Law Journal Reports, Kings (Queens) Bench Lloyds List Reports Law Reports Law Times Reports Justice of the Peace / Justice of the Peace Reports Malayan Law Journal New Zealand Law Reports Pertubuhan Arkitek Malaysia Public Work Department Probate, Divorce and Admiralty Division of High Court Queen Bench Technology and Construction Court Singapore Law Reports Weekly Law Reports Weekly Reports

xiv

LIST OF CASES

CASES AA Valibhoy & Sons Pte Ltd v. Banque Nationale de Paris [1983] 2 MLJ 26 (CA) Acrow (Automation) Ltd. v. Rex Chainbelt Inc. (1971) 1 WLR 1676 Afovos Shipping v. Pagnan [1983] 1 WLR195 Appleby v. Myers (1867) LR2CP 651 Architectural Installation Services v. James Gibbons (1989) 16 ConLR 68 Associated Pan Malaysian Cement Sdn Bhd v. Syarikat Teknikal & Kejuruteraan Sdn Bhd (1990) 3 MLJ 287 Ban Hong Joo Mines Ltd v. Chen & Yap Ltd [1969] 2 MLJ 83 Bickerton (T.A.) & Sons Ltd v. N.W. Regional Hospital Board [1970] 1 WLR 607 Bolton v. Mahadeva [1972] 1 WLR 1009 Bradley v. Newson [1919] AC 16 Brani Readymixed Pte Ltd v. Yee Hong Pte Ltd [1994] 2 SLR 552 Bremer Vulkan v. South India Shipping Corporation [1981] AC 909 British Steel Corporation v. Cleveland Bridge and Engineering [1984] 1 All ER 504 Bunge Corporation v. Tradax [1981] 1 WLR 711 C J Elvin Building Services Ltd v. Noble and Another [2003] EWHC 837 (TCC) Canterbury Pipe Lines v. Christchurch Drainage (1979) 16 BLR 76

PAGE

39 50 31 12, 13, 16

30

82 61, 67, 95, 98

56 16 32 68, 74, 95, 99 44

17 40, 41

5, 64, 95, 98 43, 54, 59, 89, 95, 102

Carr v. A. J. Berriman (1953) 27 A.LJR 273

43, 51

xv CASES Cehave N.V. v. Bremer m.b.H. [1976] 1 QB 44 Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1992] 2 All ER 609 Chilean Nitrate Sales v. Marine Transportation [1982] 1 Lloyds Rep. 570 Compagnie General Maritime v. Diakan Spirit [1982] 2 Lloyds Rep 574 Coombe v. Greene (1843) 11 M&W 480 Cornwall v. Henson [1900] 2 Ch 298 Cort v. Ambergate Railway (1851) 17 QB 127 Cory Ltd v. City of London Corp [1951] 2 KB 476 (CA) Croudace v. London Borough of Lambeth (1986) 33 BLR 20 (CA) Ctr. Jones v. Cannock (1852) 3 HLC 700 Cutter v. Powell (1795) 6 TR 320 Dakin v. Lee [1916] 1 KB 566 Davidson v. Gioyne (1810) 12 East 381 Davis Contractors Ltd. v. Fareham Urban Council (1956) [1956] AC 696 De Waal v. Adler (1886) 12 App. Cas. 141 Dcor-Wall International SA v. Practitioners in Marketing Ltd [1971] 2 All ER 216 36, 37, 59, 68, 70, 95, 99 Duncan v. Blundell (1820) 3 Stark Earth & General Contractors Ltd v. Manchester Corp. (1958) 108 LJ 665 Ellis v. Hamlen (1810) 3 Taunt. 52 Farnsworth v. Garrard (1807) 1 Camp 38 Federal Commerce v. Molena Alpha [1979] AC 757 Felton v. Wharrie (1906) HBC (4 ed.), Vol. 2, P.398 (CA) Forman & Co Pty Ltd v. The Liddlesdale [1900] AC190 Frederick Leyland & Co. v. Panamena Europea Navigacion Cia (1943) 76 Lloyd L.R. 113 Freeth v Burr (1873-74) 9 CP 208 54 62, 77, 78, 95, 100 Gaze Ltd. v. Port Talbot Corp. (1929) 93 JP 89 General Billposting Co. Ltd v. Atkinson [1909] AC118 Gilbert & Partners v. Knight [1968] 2 All ER 248 (CA) 55 31, 60 17
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5 31 40 55 70, 86, 95, 101 49 49 50 55 13, 15 15 36 27 20

13 50 15 15 31, 34, 42 50 15

xvi CASES H Dakin & Co. Ltd v. Lee [1916] 1 KB 566 Heyman v. Darwins [1942] AC 356 Hiap Hong & Co. Pte. Ltd. v. Hong Huat Development Co. (Pte) Ltd. [2001] 2 S.LR 458 (CA) Hoare v. Rennie (1859) 5 H & N 19; 29 LJ Ex 73; 1 LT 104; 8 WR 80; 157 ER 1083; 39 Digest 572, 1766 Hochster v. De La Tour (1853) 2 E&B 678 Hoenig v. Issacs [1952] 2 All ER 176 Holland Hannen & Cubitts v. W.H.T.S.O. (1981) 18 BLR 80 77 31, 45, 48 5, 13, 14, 15 17 54 PAGE 14 30, 37

Hong Kong Fir Shipping v. Kawasaki Kison Kaisha [1962] 2 QB 26 (CA) 37, 40, 42 Hua Khian Co (Pte) Ltd v. Lee Eng Kiat [1996] 3 SLR 1 Hunt and Winterbotham Ltd v. BRS (Parcels) Ltd [1983] 2 MLJ 26 (CA) Hunt v. Bishop (1853) 8 Ex. 675 Hunter Engineering Inc v. Syncrude Canada Ltd (1989) 57 DLR (4d) 321 Hutchinson v. Harris (1978) 10 BLR 19 Hyundai Industries Co. Ltd. v. Papadopoulos [1980] 1 WLR 1129 (HL) James Shaffer Ltd. v. Findlay, Durham & Brodie [1953] 1 WLR106 (CA) Jonassohn v. Young (1863) 4 B & S 296; 2 New Rep 390; 32 LJQB 385; 10 Jur NS 43; 11 WR 962; 122 ER 470; 39 Digest 652, 2459 Joseph Thorley Ltd v. Orchis Steamship Co [1907] 1 KB 660 Kah Seng Construction Sdn Bhd v. Selsin Development Sdn Bhd Suit No 22-309 of 1992 Karsales (Harrow) Ltd. v. Wallis [1956] 2 All E.R. 866 Keys v. Harwood (1846) 2 CB 905 King v. Allen & Sons Billposting Ltd. [1916] 2 AC 54 Kingdom v. Cox (1848) 5 CB 522 77, 79, 95, 100 35 21 31 49 79 36 31, 60 39 55 38 15 46 43

Lee Poh Choo v. Sea Housing Corporation Sdn Bhd [1982] 1 MLJ 324 92, 96, 102 Lilley v. Doubleday [1907] 1 KB 669 Lim Sew Lan v. Pembangunan Hysham Sdn Bhd [1995] 5 MLJ 670 Lombard v. Butterworth [1987] QB527 Low Kon Fatt v. Port Klang Golf Resort (M) Sdn Bhd [1998] 6 MLJ 448 Lubenham Fidelities & Investment Co. v. South Pembrokeshire District Council and Wigley Fox Partnership (1986) 33 BLR 39 (CA) 4, 53, 54 36 37 41 37

xvii CASES Macintosh v. Midland Counties Railway (1845) 14 LJ Ex. 338 Marshall v. Mackintosh (1898) 78 LT 750 Mersey Steel & Iron Co Ltd v. Naylor (1884) 9 App Cas 434 PAGE 55 5 5, 31, 32, 43, 48, 52, 60, 63, 83, 95, 101, 103 Modern Engineering (Bristol) v. Gilbert-Ash [1974] AC 689 Munro v. Butt (1858) 8 EB 739 Levison v. Patent Steam Carpet Cleaning Co. Ltd [1983] 2 MLJ 26 (CA) Needler v. Guest (1647) Aleyn 9 Newfoundland Government v. Newfoundland Ry. (1888) 13 App. Cas. 199 (PC) Panamena, etc. v. Frederick Leyland & Co. Ltd [1947] AC 428 Parker Distributors (Singapore) Pte Ltd v. Svenborg [1959] AC 576; [1959] 3 All ER 182 (PC) Percy Bilton v. Greater London Council [1982] 1 WLR 794 Perini Corporation v. Commonwealth of Australia (1969) 12 BLR 82 Peter Dumenil v. James Ruddin [1953] 1 WLR 815 (CA) Photo Production Ltd v. Securicor Transport Ltd [1980] AC 827 Portman v. Middleton (1858) 4 CB (NS) Re Aldborough Hotel Co., Simpsons Case (1869) 4 Ch. App. 184 Re Lindsay, Ex parte Lambton (1875) 10 Ch. App. 405 Rees v. Lines (1837) 8 C&P 126 Roberts v. Bury Commissioners (1870) LR4CP 755 Ross T. Smyth & Co. Ltd v. T.D. Bailey, Son & Co. [1940] 3 All ER 60 Scandinavian Trading v. Flota Ecuatoriana [1983] 2 AC 694 Schuler (L.) A.G. v. Wickman Machine Tool Sales [1974] AC 235 (HL) Simpson v Crippin (1872-73) 8 QBD 14 Sinclair v. Bowles (1829) 9 B&C 92 Smyth v. Bailey [1940] 2 All ER 60 Southern Foundaries v. Shirlaw [1940] AC 701 Spettabile v. Northumberland Shipbuilding Co. (1919) 121 LT 628 31, 33, 43, 60 41 42 62 13, 15 32 49 49 39 56 53, 54 43 38, 45, 46 13 20 19 51 50, 51 16 53 30 13 39 11

State Trading Corporation of India v. Golodetz [1989] 2 Lloydss Rep. 277 (CA) 41

xviii CASES Stegmann v. OConnor (1899) 81 LT 627 (CA) Stevens v. Taylor (1860) 2 F&F 419 Stirling v. Maitland (1864) 5 B&S 840, 852 Sumpter v. Hedges (1898) 1 QB 673 Suisse Atlantique v. N.V. Rotterdamsche Kolen Centrale [1967] 1 AC 361 PAGE 15 55 49 14 31, 37,

40, 44, 47, 60 Supamarl v. Federated Homes (1981) 9 ComLR 25 Sutcliffe v. Chippendale & Edmondson (1971) 18 BLR 149 Sutcliffe v. Thackrah [1974] AC 727 Sweatfield Ltd. v. Hathaway Roofing Ltd. [1997] CILL 1235 Sweet & Maxwell Ltd. v. Universal News Service Ltd. [1964] 2 QB699 (CA) Sze Hai Tong Bank v. Rambler Cycle Co [1959] AC 576; [1959] 3 All ER 182 (PC) Terry v. Duntze (1795) 2 Hy. Bl. 389 The Mihalis Angelos [1971] 1 QB 164 (CA) Toepfer v. Cremer [1975] 2 Lloyds Rep.118 (CA) Tramways Advertising Pty Ltd. v. Luna Park (NSW) Ltd. (1938) 38 S.R. (NSW) 632 Trollope & Colls v. Singer (1913) HBC (4 ed.) Turriff v. Richards & Wallington (1981) 18 BLR 19 UGS Finance v. National Mortgage Bank of Greece [1964] 1 Lloyds Rep. 446 Valpy v. Oakeley (1851) 16 QB 941 Vigers v. Cook [1919] 2 KB 475 (CA) Wates Ltd. v. Greater London Council (1983) Wells v. Army & Navy Co-op Society (1902) 86 LT 764 Williams v. Roffey Brothers [1990] 2 WLR 1153 (CA) Withers v. Reynolds (1831) 109 ER 1370 Wong Poh Oi v. Guok Gertrude & Anor [1965-1968] 1 SLR 455 Woodar v. Wimpey [1980] 1 WLR 277
th

54 30 53 49 43

38 11 31 43

36 55 44 38 19 13, 15 28 55 15 52, 79 68, 95, 99 31, 32, 33, 43, 60