Abstract:
It was generally understood in the context of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“SOP Act”) that there was a dual-track system for progress payments under a construction contract. However, the recent decisions by the Court of Appeal in Shimizu Corp v Stargood Construction Pte Ltd [2020] 1 SLR 1338 and Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte Ltd [2019] 2 SLR 189 now make clear that this system does not exist and that the underlying contract governs a contractor’s entitlement to payment under the SOP Act. In doing so, the Court of Appeal abolished the notion that there could be a separate, statutory entitlement to payment under the SOP Act. This article attempts to unpack the concept of the “dual-track” system and explore the implications of both decisions by the Court of Appeal.