Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Building and Construction Industry Security of Payment (Amendment) Bill [Bill no. 38/2018]
Sir, I stand in support of this Bill, which refines the framework for efficient and low-cost adjudication of payment disputes in the construction industry.
I would first like to commend BCA on the public consultation that it conducted in June 2018 on the proposed amendments. Following the consultation, BCA provided responses to key feedback received and refined some proposed amendments after hearing the public’s suggestions.
I am heartened by BCA’s engagement with the public in crafting this Bill and believe that the process has resulted in a stronger piece of legislation.
I just have three clarifications on the proposed amendments.
Replacement of review adjudicators
The new Sections 19 (1A) and (1B) clarify that the adjudication review starts anew if all the review adjudicators are replaced.
During the public consultation, it was suggested that the adjudication review start afresh when majority of the panel of review adjudicators is replaced.
BCA responded that if the replacement adjudicators need more time to bring themselves up to speed, the review adjudicators can seek an extension of time subject to the consent of both the claimant and respondent.
If parties can consent to extending time to allow review adjudicators to be brought up to speed, why not also allow parties to consent to having the review start afresh?
Assessment of damages, loss or expense
Next, the new Section 19(5A) clarifies that adjudicators can only consider damages, loss or expense items which are supported by documents showing agreement between party on the amount or a certificate certifying the claim issued under the contract.
BCA had stated that this keeps adjudication speedy and low cost by removing the need for adjudicators to consider complex loss and expenses claims.
The Small Claims Tribunal has jurisdiction to hear a tort for damage caused to property, which includes claims for losses or expenses incurred by owners of property as a result of careless, reckless or improper acts by others.
There is no requirement that the claims for losses or expenses be support by written agreement on the amount. It is also able to hear claims arising from oral agreements.
The SCT is similarly intended to provide an efficient and inexpensive channel to resolve consumer-supplier disputes. The power of the SCT to consider losses or expenses claims in the absence of clear documentation does not seem to impede the expediency of the tribunal.
Can the Minister clarify why loss and expenses claim should be beyond the power of adjudicators to assess?
If these claims cannot be resolved by the adjudication process, parties have to resort to arbitration or litigation. As pointed by BCA, these matters are slightly more complicated which will incur even greater costs for parties if they have to adjudicate or litigate these claims.
These are precisely the cases that require a simpler and cheaper dispute resolution process. It would also be more efficient for all heads of claim relating to the same dispute to be heard by a single body.
Respondent’s right to object to payment claim if not raised previously
Lastly, the new Section 19(6A) clarifies that a respondent setting aside the adjudication determination can only raise a fresh objection to the payment claim if (1) new circumstances had arisen, (2) the objections could not have been made earlier because the respondent could not have known of these reasons, or (3) there was a patent error.
While the second limb implies that there should be no fault on the part of the respondent in failing to raise the objections earlier because they could not have known of these reasons, the first limb is not clear on the element of the respondent’s fault.
Can the Minister clarify whether Section 19(6A)(a) requires that the new circumstances arose out of no fault of the respondent?
Sir, clarifications notwithstanding, I stand in support of this Bill.