SOCIETY OF CONSTRUCTION LAW (SINGAPORE) SCL DEBATE ON WEDNESDAY 24TH AUGUST 2011 @ 5.30pm‐6.30pm RE: SINGAPORE CONSTRUCTION CONTRACTS INHERENTLY BIASED TOWARDS EMPLOYERS PROPOSITION
:
Bill
Gallagher
[BG],
James
Taylor
[JT],
Mohan
Pillay
[MH]
OPPOSITION
Eugene
Seah
[ES],
Calvin
Pereira
[CP],
Daniel
Koh
[DK]
:
MODERATOR
:
Christopher
Nunns
[CN]
1. The
debate
began
with
the
Chris
introducing
the
members
of
the
Proposition
and
Opposition
and
their
respective
team
members.
2. The
Proposition
members
wore
bright
yellow
construction
safety
helmets
and
were
called
“The
Hats”
team
by
Chris.
3. The
Opposition
members
wore
bright
red
t‐shirts
and
were
called
“The
Red
Shirts”
team
by
Chris.
1st Speaker: Proposition – Bill Gallagher (BG)
1. Bill
kicked
things
off
by
giving
us
his
list
“of
things
that
kept
him
awake
at
night”.
2. To
Bill,
it
was
a
“surprise”
for
the
Contractor
to
go
first.
3. Bill
also
spoke
on
realities
of
The
Construction
Environment;
with
(a)
Short
of
construction
periods,
(b)
Highly
competitive
bids,
(c)
Qualifications
resistant,
where
pricing
and
not
qualifications
matter
more
and
(d)
Ongoing
relationship
issues
always
a
struggle.
4. Bill’s
view
is
that
the
Contractor’s
voice
is
“a
quiet
one”.
5. Also
raised
were
the
constant
“Discrepancies”;
for
example
(a)
the
Architect’s
concept
being
his
dream,
(b)
the
Engineer’s
calculations,
(c)
the
Contractor’s
price
and
(d)
the
Employer
wants/demands.
6. Bill
added
that
the
issue
of
the
Contractor’s
test
of
foreseeability;
where
he
is
deemed
to
have
found
it.
7. Another
was
when
dealing
with
Warranties;
being
at
the
Employer’s
sole
discretion
and
for
his
‘Absolute
Satisfaction’.
8. Finally,
Bill
brought
up
that
dealing
with
Extension
of
Time
(EOT)
and
Time
of
Completion
are
always
left
till
the
Final
Account.
2nd Speaker: Opposition – Eugene Seah (ES) 1. “My
wife
is
biased
against
me,
she
doesn’t
listen
to
me”.
2. This
was
the
opening
line
by
Eugene.
3. His
point
was
that
the
contract
standard
forms
were
not
biased
against
the
Contractor.
4. Eugene
pointed
out
that
the
intent
of
Standard
Forms
was
primarily
to
allocate
risks
of
the
parties.
Page
1
of
5
5. However,
these
Standard
Forms
would
almost
always
be
“embellished”
by
lawyers
and
Quantity
Surveyors
(QS).
6. Furthermore,
Eugene
added
that
the
terms
in
the
Standard
Forms
are
often
not
followed.
As
an
example,
he
cited
the
issue
of
Payments;
hence
the
need
for
the
SOP
Act.
7. On
the
project,
the
Superintending
Officer
(SO)
was
in‐charge
of
the
Contract
Administration
and
he
is
also
the
Employer’s
Representative.
8. Eugene
further
added
that
Standard
Forms
allows
some
flexibility.
9. Eugene
also
emphasised
that
the
Standard
Forms
allow
Contractor’s
claims.
10. As
a
final
touch,
Eugene
summarised
his
points
in
a
Rap;
wherein
he
said
that
(a)
Standard
forms
are
balanced
and
(b)
Fair
&
reasonable
to
all.
Chris Nunn:
Eugene
took
his
chance
to
increase
his
market
share.
3rd Speaker: Proposition – James Taylor (JT)
1. James
began
by
stating
that
the
problem
of
bias
began
in
the
Contract
Administration.
2. James
further
added
the
individual
clauses
in
themselves
may
not
be
a
problem
but
the
contract
as
a
whole
does
have
flaws.
3. Often,
James
said,
was
not
what
clauses
do
say
but
what
clauses
don’t
say.
4. James
cited
the
Latham
Report
as
something
the
industry
players
ought
to
read
and
note.
5. James
also
rebutted
the
Opposition
by
saying
that
the
Standard
Forms
assumes
that
the
Contractor
is
“Evil”.
6. James
further
added
that
conversely
the
Standard
Forms
demanded
very
little
from
the
Employer’s
Consultants.
7. James
also
gave
some
examples
of
onerous
conditions
in
the
Standard
Forms.
For
example,
in
REDAS
Design
&
Build,
Clause
2
required
a
10%
Cash
deposit
from
the
Contractor.
8. Another
example
was
that
the
REDAS
Form
set
Notices
as
a
Condition
Precedent,
requiring
the
Contractor
to
submit
within
28
days
Notices
with
full
particulars.
4th Speaker: Opposition – Calvin Pereira (CP) 1. Calvin
shared
that
that
he
had
worked
on
Marina
Bay
Sands
(MBS)
project;
where
he
handled
well
over
600
to
700
Tenders.
2. All
the
Contractors
he
met
all
said
that
they
were
able
and
willing
to
manage
the
Risks
of
the
contract.
3. Also,
Calvin
added,
none
of
the
Contractors
said
that
the
Contracts
were
not
fair.
4. Calvin
emphasised
that
Employers,
in
general,
did
not
handle
construction
as
it
is
not
his
core
business.
5. Calvin
also
added
that
with
regards
to
Payment,
especially
claims,
it
needs
the
Employer
to
understand
how
this
works.
Page
2
of
5
6. Calvin
view
was
that
the
Contractor
has
a
role
in
this
as
well.
7. The
Contractor,
Calvin
added,
makes
the
Employer
and
“evil”
one
when
the
Employer
doesn’t
pay
what
the
Contractor
wants.
8. Calvin
wanted
to
highlight
that
that
there
were
also
contract
provisions
that
were
inherently
biased
against
the
Employer.
9. The
SOP
Act
provisions,
for
example,
he
said,
protects
the
Contractor
with
a
“One
size
fits
all,
immaterial
whether
the
contract
is
$1
Million
or
$1
Billion;
with
The
Employer
having
only
21
days
to
respond.
10. On
the
whole,
Calvin
opined
that
it
is
a
fallacy
that
the
Singapore
contract
is
biased
against
the
Contractor.
The Floor: Chris
then
opened
the
feedback
and
response
from
the
Floor.
(1) John
Dudley
Baker,
BK
Burns:
Had
a
question
for
the
Opposition.
•
JDB
:
Asked
if
Risk
be
apportioned
to
party
who
can
best
manage
it?
•
CP
:
Responded
by
saying
that
it
is
incumbent
on
the
Contractor
to
make
it
known
before
signing
contract.
(2) Chris
Nunns,
FTI
Consultants:
Chipped
it
to
add:
•
Perhaps
contract
should
be
managed
to
suit
the
culture
and
style.
•
In
Singapore,
contracts
are
adversarial.
(3) Gordon
Smith,
Kennedys:
had
a
go
at
it
and
added:
•
Singapore
is
unique
in
drafting
contracts.
•
The
SIA
using
Duncan
Wallace,
an
anti‐Contractor
barrister
/lawyer;
to
draft
the
SIA
Standard
Form
of
Conditions
of
Contract.
(4) Chris
Nunns,FTI
Consultants:
also
pointed
out:
•
That
the
MBS
used
the
PSSCOC
instead
of
drafting
its
own
and
deleted
unforeseen
ground
conditions;
despite
having
“no
budget
constraints”.
(5) John
Moholds:
had
this
to
add:
•
That
is
was
not
feasible
to
build
in
time
periods
given.
•
BG
:
view.
Responded
by
saying
that
“it
was
rare
to
get
audience”
to
listen
to
such
a
(6) Tina,
Trescow:
Asked
about:
•
Design,
Development
Contracts.
•
BG:
Responded
by
saying
that
Design,
Development
Contracts
can
“cloak”
contracts.
Page
3
of
5
(7) Basil
Georgion
(West
Australia):
•
Was
in
favour
of
the
principle
motion
of
the
debate.
(8) Jackson
Mcdonald:
had
this
to
say:
•
Even
when
the
Employer
was
asked
to
change
clauses,
“they
don’t”
•
But
he
further
added
that
in
the
early
days
when
contractors
exploited
the
even‐handed
clauses.
(9) Chris
Nunns,
FTI
Consultants:
Chipped
it
to
add:
•
Contactors
in
Singapore
rather
“timid”
compared
to
their
counterparts
in
Hong
Kong.
•
BG:
Responded
by
saying
that
in
Hong
Kong,
Contractors
were
more
“vocal”
but
in
Singapore,
Contractors
were
more
“Diplomatic”.
Back to the Debate: Chris
then
introduced
his
Cousin‐in‐law,
whom
he
had
“high
expectations”
of.
5th Speaker: Opposition – Daniel Koh (DK) 1. Daniel
thought
that
the
Proposition
had
the
“tougher”
job.
2. Daniel
took
the
view
that
“Biased”
meant
that
it
would
be
“impossible”
for
the
Contractor
to
work.
Also,
the
words
“Inherently
biased”
must
therefore
mean
that
the
contracts
were
“stacked
against”
the
Contractor.
Daniel
felt
that
this
was
“not
right”.
3. Daniel
then
quoted
James
who
said
that
the
contract
itself
was
not
“inherently
biased”.
4. Daniel
then
cited
SIA
Clause
15,
“Right
of
Contractor
to
sub‐contract”
and
that
the
Employer
cannot
withhold
the
Contractor’s
right.
5. As
for
the
BG’s
issue
concerning
the
EOT,
notice
required
as
condition
precedent;
Daniel
opined
that
the
Architect
is
also
subject
to
conditions.
6. “Colour
of
Money
is
a
constant
RED”;
was
Daniel’s
view.
7. Contract
Conditions
get
Contractors
to
stick
to
timelines
and
the
Consultants
must
also
manage
on
behalf
of
Employers.
8. As
for
the
payment
grouses
of
the
Contractor,
Parliament,
the
“We”,
passed
the
SOP
Act.
9. All
Singapore
Standard
Form
Contracts
‘import’
the
SOP
Act.
10. To
conclude,
Daniel
gave
a
“Hi
5”
(taking
the
queue
from
Presidential
Candidate
Tan
Kin
Lian)
and
said
that
contracts
here
were
fair
to
all
parties.
6th Speaker: Proposition – Mohan Pillay 1. “No
TANs
in
the
Opposition
and
the
Proposition
was
of
the
wrong
ethnic
group,
so
debate
was
not
about
Presidential
Elections”.
2. That
got
the
crowd
in
stiches
and
Mohan
kept
the
momentum
going,
from
that
first
salvo.
Page
4
of
5
3. Mohan
asked,
“
Where
do
standard
forms
originate
from?”
and
replied,
“All
from
Employers
or
Consultants”.
4. Mohan
contended
that
Eugene
couldn’t
cite
any
balanced
Singapore
Standard
Forms
simply
because
there
aren’t
any.
5. To
Calvin
who
said
that
that
the
contracts
allowed
the
Contractor
to
make
claims,
Mohan
reminded
that
the
Contractor
cannot
claim
unless
he
gets
a
formal
instruction
but
when
the
Contractor
asks
for
the
formal
instruction
he
is
considered
as
wasting
time.
6. Mohan
suggested
that
Partnership
may
be
the
better
way
forward.
7. However,
Mohan
was
quick
to
add
that
some
Employers
take
the
view
that
the
contractual
relationship
should
be
either
master‐slave
or
master‐dog.
The Result: Chris
reminded
the
audience
to
give
merits
to
the
arguments
and
performance
of
the
teams.
The
result
was
to
be
determined
by
a
“SHOW of HANDS”. Chris:
The
“hats”
(Proposition)
have
it;
by
a
large
majority.
Conclusion: Chris:
Will
always
remember
Eugene’s
song
and
dance.
Page
5
of
5