In Range Construction Pte Ltd v Goldbell Engineering Pte Ltd [2020] SGHC 191, Justice Lee Seiu Kin had opined that he “did not consider the introduction of s 17(2A) of the SOP Act to be any signal of parliamentary disapproval of adjudicators considering liquidated damage claims under the SOP regime”. Following Range, various adjudicators have interpreted Justice Lee’s statement as authority that Section 17(2A) of the SOP Act does not apply to claims/set-offs for liquidated damages.
However in the recent Court of Appeal decision in Orion-One Residential Pte Ltd v Dong Cheng Construction Pte Ltd [2020] SGCA 21, the Court of Appeal reinforced the view that Section 17(2A) of the SOP Act was intended to exclude claims for “complicated prolongation costs, damages, losses or expenses”, as such claims “[went] beyond the original scope of the [SOPA], which [was] intended to cover claims for work done or goods and services supplied” .
While Orion-One does not directly address the decision in Range on the inapplicability of Section 17(2A) to liquidated damages, the Court of Appeal’s comments (at [45] and [46]) suggest that the SOP Act was only intended to cover claims for work done or goods/services supplied, and not claims for damages (including liquidated damages), which would be caught by Section 17(2A). T
he applicability of Section 17(2A) to liquidated damages remains in flux. The express wording states that damage, loss or expense, which would include liquidated damages, must be disregarded. However, this is not easily reconciled with Justice Lee’s decision in Range which unequivocally suggests that Section 17(2A) does not apply to liquidated damages. As Range is currently on appeal, we can only hope for clarity in this issue.