REVISIONS TO THE BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT (AMENDMENT) ACT 2018: INSIGHTS AND FURTHER IMPROVEMENTS

Abstract

This dissertation aims to suggest improvements to Singapore’s existing Building and Construction Industry Security of Payment Act 2018 (SGSOPA) in the areas of payment claims, payment responses, adjudication proceedings, adjudication review and setting aside of determinations. Suggested improvements were crafted after analysing the issues that arise from the SGSOPA and comparing with equivalent acts from New South Wales (NSW) and New Zealand (NZ). Since the SGSOPA was recently amended in 2018, not much research and critique on SGSOPA has been done. Hence, this highlights the research gaps and improvements that can be made on SGSOPA.

Issues that arise from the existing SGSOPA would be studied in depth so as to develop potential improvements to the SGSOPA. The issues covered in this dissertation are relating to: (1) loss & expense and damage claims during adjudication proceedings, (2) patent errors in adjudication proceedings, and (3) claimant’s financial status during adjudication review process and setting aside proceedings.

NSW and NZ’s equivalent acts, namely NSWSOPA and CCA respectively, were selected for a comparative analysis with SGSOPA. Similar to SGSOPA, NSWSOPA was amended in 2018 and only allowed for disputes relating to progress payments to be referred to adjudication. On the flip side, CCA was introduced on the same year as SGSOPA in 2004, but interestingly, it allows all kinds of dispute to be referred to adjudication. Through the comparative analysis, differences identified which may be useful as potential improvements to SGSOPA includes: (1) wider scope for loss & expense and damage claims to be regarded in adjudication, (2) lesser grounds for respondents to set aside adjudication determinations, and (3) shorter withheld payment duration through abolishing the adjudication review proceedings.

Hence, the issues identified from existing SGSOPA and the differences identified from NSWSOPA and CCA that can be potential improvements to SGSOPA formed the research hypotheses. The hypotheses went through a validation process via interviews with 8 industry practitioners (21.05% response rate) and any literature reviews if any. Thereafter, the results were analysed with a qualitative approach.

Lastly, with the three recommendations that were drafted from the validated hypotheses, the dissertation concludes with how they can improve SGSOPA. The validated hypotheses are: (H1) adjudication can consider other evidence other than quantum agreed or certificates to regard payment claims or payment responses, appointment of a new personnel responsible for deciding on validity of payment claims and payment responses if there is no quantum agreed or certificates issued for loss & expense (H2a) and damage (H2b) claims, (H3b) Patent errors should not be used as defence for setting aside of adjudication determinations, (H4) Appointment of a new personnel responsible for determining existence and severity of patent errors in payment claims, (H6) ½ of adjudicated amount should be paid to claimant before adjudication review proceedings, and (H7) ½ of unpaid portion of adjudicated amount should be paid to claimant before setting aside proceedings. The recommendations would allow for a more balanced fairness between the claimant and the respondent, which will make adjudication more transparent and welcomed by parties in the building industry.