OUTLINE OF SINGAPORE CONSTRUCTION LAW & PRACTICE

(adapted from a paper presented by Mr George Tan at a seminar organised by the Real Estate Developers’ Association of Singapore in August 1994)

 

GENERAL
The conceptual underpinnings of construction law in Singapore is the law of contract. For many years, it has been regarded as nothing more than an interpretation of the contract that the parties have entered into. However, in recent years, consistent with a trend that we understand is happening in other jurisdictions, construction industry practices and methodologies have engendered disputes that compel developments in concepts and principles that cannot fit comfortably into orthodox categories found in textbooks on basic contract law. There is now a growing amount of texbooks and articles treating construction law as a subject independent of contract law, the same way that banking or insurance law has always been treated. Authorities and texbooks from U.K. continue to be of much persuasive value and can be consulted for the theoretical background. However, some caution should be exercised in relying on them for guidance on any particular situation as Singapore has home grown practices that are different from that of the U.K. For instance, the current standard form issued by the Singapore Institute of Architects although drafted by a U.K. lawyer, departs substantially from U.K. standard forms. Singapore also has a local set of Standard Method of Measurement of Building Works issued by the Singapore Institute of Surveyors and Valuers (S.M.M. Rules) that differs considerably from the U.K. version from which it originates. Aside from a body of local caselaw that is fast growing, there is also a large number of legislation relating to construction activity.

CONSTRUCTION CONTRACTS
In practice, the employer in Singapore, usually adopts one of the standard form contract in current use. For the construction of buildings, the most popular form of contract is the current SIA standard form. Occasionally, one do see the previous version of the SIA standard form or the current JCT forms being used. Sometimes, one can also find some of the forms used by the various public authorities (eg. PWD, PUB, PSA or even HDB) being used by private employers. For engineering works, the I.C.E. or FIDIC forms (or modifications of these forms) are usually used. It is important, however, to note that most of these standard forms, particularly those that are conceived locally, usually envisage the adoption of the traditional structure (ie. the British system of appointing an architect or engineer to supervise works given to a contractor engaged through a system of competive tender). The Construction Industry Development (CIDB) has recently introduced a new standard form for use in all public sector construction projects, replacing the various forms issued by the different governmental agencies and statutory boards. They are not normally appropriate (at least without some amendments) if some other arrangements (e.g design and build) are adopted.

Like construction contracts elsewhere, there are roughly 3 main types of contractual structures in Singapore which can be actually adopted:

  the traditional structure;
  design and build or the "turnkey" arrangements
  management contracts.

In Singapore, the traditional structure is the one that is prevalent. It is relatively rare to see design and build arrangements or management contracts, particularly for the construction of buildings. There are many reasons for this and they may be conveniently summarised as follows:

(a) Standard form contracts, including local varieties, are easily available for the traditional method. There are not many standard form design and build contracts and the recent ones usually used in Singapore are either adapted from the JCT standard form or specially drafted. There are hardly any management contracts used here in Singapore. They are usually used for the construction of industrial structures or plants. Most of them are usually specially drafted; the more recent ones are adaptations of another JCT standard form. Other that the traditional method, most consultants here are not familiar with the other contractual structures.

(b) Most of our local legislation and regulation were promulgated on the assumption that owner or employer would adopt the traditional method of contracting. Thus, for example, the Building Control Act 1989 generally anticipates the "qualified person" in the role of a contract supervisor. This would not be the case in a design and build arrangement which he would in all probability be engaged by the contractor.

(c) The financing of projects in Singapore are usually structured around the traditional method and release and disbursements of funds are usually linked to certifications by a contract supervisor. Some creativity and careful thought would have to go into the drafting of loan and security documentation to take into account non-traditional methods. For property governed by the Housing Developers Act, the Act also mandates that the sale and purchase of individual units are to be governed by agreements that provides for progressive payments by the purchasers according to the contract supervisor's (architect's) certifications.

NATURE OF CONSTRUCTION WORK
Construction work in Singapore can be broadly classified into the following categories:

  building works;
  civil engineering works;
  industrial process/plant works;
  marine and offshore oil and gas works.

ROLE OF CONSTRUCTION PREFESSIONALS IN SINGAPORE
It is usual under the traditional approach for the employer to first engaged the professional who would later be the contract supervisor. In the case of building projects that person would usually be the architect. Subsequent to the appointment of the architect, the employer or the architect would usually appoint the other professionals like the quantity surveyor, the structural engineer and the mechanical and electrical engineer. Contracts are entered into between the employer and the respective consultants. For the architect, the contract can be in the standard form of the Singapore Institute of Architects' Conditions of Appointment which also contains the Scale of Professional Charges.

A similar form issued by the Association of Civil Engineers, Singapore (A.C.E.S.) is also available for the appointment of engineers. The architect (or engineer) would usually prepare a design. He would usually by himself or with the other consultants prepare the drawings, the specifications, the bills of quantities and other documentation that would constitute the contract documents. The design process may involve a number of stages and should commence with a feasibility study. The architect's drawings would probably start from general sketches to detailed drawings that are in turn amplified by shop drawings and specifications or the bills of quantities (if any). Usually fairly large building works would involve the preparation of drawings of certain parts of the building by the other specialist consultants. Designs of the foundations and frame are usually left to the civil or structural engineer. The designs of the electrical, air-conditioning, fire protection and plumbing systems are often left to the mechanical and electrical engineers or other specialist engineers. The architect, as contract supervisor and in his capacity as the "qualified person" under the building statutes and regulations, would have the task of coordinating the designs. For small projects, the architect may be the sole designer. Any specialist design requirement may be made the obligation of the contractor in the specifications or other contract documents. He can, of course, on his own engage the specialist consultants ordinarily engaged by the employer.

Eventually the design documentation must be in sufficient detail to enable tenderers to submit competitive tenders for the construction of the works. The successful tenderer would then be "awarded" the contract.

In the traditional structure, as the design function is usually left in the hands of the consultants, there will not be any competitive design submitted. The employer should usually know that the construction of the works is competitively priced. The employer, on the other hand, can never be sure whether other designers would have come up with better designs in terms of costs, performance or other criteria that the employer may consider important.

The construction of buildings with the introduction of new technology is getting more complex. Much out this may be outside the scope of activity or knowledge of the consultants traditionally involved in the construction of buildings. It is relatively rare for employers in Singapore to engage specialist consultants for computers, air-conditioning or lifts and would usually rely on the mechanical and electrical engineer or even, the specialist subcontractors.