Dispute Resolution Singapore Client Alert September 2015 Singapore Court of Appeal holds that the lodgement deadline for documents stipulated under the SMC Adjudication Procedure Rules is valid In Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd  SGCA 42, the Court of Appeal overturned the High Court decision to set aside an adjudication determination made under the Building and Construction Industry Security of Payment Act ("SOP Act"). At the adjudication, the adjudicator, relying on Rule 2.2 of the Singapore Mediation Centre's Adjudication Procedure Rules ("SMC Rules"), had rejected an adjudication response that was lodged at 4.32 pm on the final day for lodgement - 2 minutes out of time. The adjudicator ruled that the adjudication response was deemed to be lodged on the next day (pursuant to Rule 2.2 of the SMC Rules) and hence was lodged out of time. The Respondent in the adjudication thus took out an application to set aside the adjudication determination. The Court of Appeal allowed the appeal against the High Court's decision to set aside the adjudication determination. It held, inter alia, that the SMC had the power to make procedural rules for the proper administration of the SOP Act and that Rule 2.2 of the SMC Rules was not ultra vires. The restricting of the lodgement deadline for documents on a particular day to 4.30 pm was valid, even though it meant that a respondent may not have the full 7 days allowed under the SOP Act. Parties who need to lodge documents with the SMC must do so with regard for logistical issues such as the opening hours of the SMC's office. Facts Citiwall Safety Glass Pte Ltd (“Citiwall”) was awarded a sub-contract by Mansource Interior Pte Ltd (“Mansource”) in relation to certain works. On 5 August 2013, Citiwall issued a payment claim pursuant to the SOP Act for the sum of SGD 322,536.65. Mansource issued a payment response pursuant to the SOP Act for only SGD 93,732.10. Citiwall thereafter applied for an adjudication pursuant to the SOP Act to claim the difference. Citiwall lodged its adjudication application with the SMC on 28 August 2014. Under the SOP Act, Mansource had to lodge its adjudication response within 7 days after the receipt of the adjudication application. The last day to do so was 5 September 2013 and Mansource lodged its adjudication response at 4:32 pm on that day. However, Rule 2.2 of the SMC Rules requires that all documents to be lodged with the SMC shall be lodged during the opening hours of 9 am - 4:30 pm and that documents lodged after opening hours shall be treated as being lodged For further information please contact Nandakumar Ponniya +65 6434 2663 email@example.com Wong Tjen Wee +65 6434 2686 firstname.lastname@example.org Baker & McKenzie.Wong & Leow 8 Marina Boulevard #05-01 Marina Bay Financial Centre Tower 1 Singapore 018981 www.bakermckenzie.com 2 Client Alert September 2015 the next working day. On the basis of Rule 2.2, the adjudicator took the view that the adjudication response was lodged on 6 September 2013, and not 5 September 2013. This meant that the adjudication response was lodged out of time, and the adjudicator therefore rejected the adjudication response. The adjudicator issued his determination without considering the adjudication response. Mansource applied successfully to the High Court to set aside the adjudication determination on the basis that the adjudicator wrongly rejected its adjudication response as being out of time. The High Court held that the enactment of Rule 2.2 of the SMC Rules was ultra vires the powers of the SMC under the SOP Act. Citiwall appealed to the Court of Appeal to overturn the High Court's decision. The Court of Appeal's Decision The Court of Appeal allowed Citiwall's appeal, holding that the adjudicator was not wrong to reject Mansource's adjudication response as being out of time. Rule 2.2 of the SMC Rules is not inconsistent with the SOP Act. The SMC was appointed to administer the SOP Act and the SMC rules complemented the Act for administrative matters. The SMC has the power to designate its opening hours via its rules and it should not be expected to stay open until midnight to allow parties to lodge the relevant documents. The lodgement deadline was clearly stated. The SMC should not be faulted for closing its office at 4:30 pm simply because Mansource filed the adjudication response late. While there may be practical difficulties lodging documents when the SMC's office is closed on Saturdays and Sundays, the validity of a rule has nothing to do with such considerations. The Court also held that the adjudicator did not indiscriminately follow Rule 2.2 to reach his decision. The adjudicator rejected the adjudication response because he had considered the legal effect of the SMC rules and concluded that it was a valid rule enacted by the SMC pursuant to the SOP Act. Therefore he was obliged to reject the adjudication response under the SOP Act. Mansource further argued that as the lodgement was only two minutes late, it should have no impact on the Adjudication Response. The Court rejected the de minimis argument, while affirming the principle of "temporary finality" with respect to proceedings under the SOP Act. The SOP Act aims to dispense quick and interim relief for payment disputes in the construction industry. If the parties feel that their substantive rights have been interfered with, they can file a substantive suit for remedies or submit the matter to arbitration. Comment This Court of Appeal decision confirms that the deadline to lodge any documents by 4:30 pm on the last day under the SMC Rules is valid. Any document lodged after 4:30 pm on the last day for lodgement shall be considered to have been lodged out of time on the next working day. Rule 2.2 also stated clearly that the SMC's office will close early on the eve of Christmas, New Year and Chinese New Year. Parties lodging documents should take note of the early closures, public holidays and weekends when observing the 7-day time limit prescribed by the SOP Act. Such logistical issues will not be valid reasons to justify a late document lodgement. There are practical difficulties that must be borne in mind - an example is where the adjudication application is served on a party on a Friday, and the 3 Client Alert September 2015 following Friday is a public holiday. The date on which the adjudication response must be lodged then falls on a Saturday. Since the SMC is closed on a Saturday, it would not be possible for the adjudication response to be lodged. In such cases, the sympathy does not appear to lie with the respondent - and he should file the adjudication response by 4.30 pm on Thursday, i.e. less than 6 full days to file a response. ©2015 Baker & McKenzie.Wong & Leow. All rights reserved. Baker & McKenzie.Wong & Leow is a member of Baker & McKenzie International, a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.