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It's Here - SOP Act (Amendment) -
Operation From 15 Dec 2019
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Construction Knowledge
For those of us related to Singapore construction sector, the Building and Construction Industry Security of Payment
Act 2004 ("Principal SOP Act") is something which has reformed (to a great extent) the payment claim and certifica-
tion behaviour of the parties.
For the uninitiated (especially from jurisdictions other than Singapore) the Principal SOP Act was enacted on 16 No-
vember 2004. Under the regulations made by the Minister pursuant to section 41 of the Principal SOP Act, it had
come into operation with effect from 1st April 2005. So it has been more than 14 years since the Act came in to
force.
The Principal SOP Act was enacted to protect the cash flow of contractors. It was intended to be straight and simple
to ensure that the payments are progressively made for the corresponding work done under the concerned contract.
After more than a decade of its enactment, a lot of procedural and technical issues have been relied upon to set
aside the adjudication award. Despite the various pitfalls, we feel Principal SOP Act has had its desired effects in
Singapore. We have heard similar affects about its effectiveness from its proponents in other applicable common-
wealth jurisdictions.
Despite being very effective, there have been intermittent calls for certain clarifications and/or changes with regards
to the certain provisions of the Principal SOP Act. Way back in 2015, the Law Reform Committee of the Singapore
Academy of Law had also submitted proposals for amending the Principal SOP Act. Eventually, the Building and
Construction Industry Security of Payment Amendment Bill 2018 ("Amendment Bill") was passed on 2 October 2018
and assented to by the President on 31 Oct 2018. It is this Amendment Bill which has been brought in to operation
on 15 Dec 2019.
The Amendment Bill incorporates extensive changes to the Principal SOP Act. The amendments are too wide ranging
and impact most of the aspects of the original legislation. The definition of applicable contract, terminated contracts,
inclusion of prefabricated contracts, payment claim submission date, duration for payment certification, acceptance
of a payment certificate, definition of patent error, provision for replacement adjudicator, interest for overdue pay-
ment, limitation period/bar, application rejection grounds, loss and expense claims/undocumented claims, adjudicat-
ed amount deposit, adjudication application review by claimant, express reference to court's powers of remission
and other such critical aspects of the Principal SOP Act have been amended vide Amendment Bill. There are also
saving and transitional provisions which stipulate the applicability of each of the individual amendments with re-
gards to date of applicable contract, payment claim submission date and adjudication application submission date as
compared to the enforcement date of Amendment Bill.
The phrase some love it, some hate it but definitely no one can ignore it aptly sums up the impact of the SOP Act.
As such, irrespective of which side of the divide your are in, it is highly recommended to be aware of the changes
brought in by the operation of SOP Act (Amendment). Many seminars have been and are being conducted by key
industry players to disseminate the information related to these amendments. So it may be a good time to appraise
ourselves of what these amendments entail and how our existing systems, processes, documentations (including
draft contract provisions, interim and final payment certifications, loss and damage claims related strategies) have to
be aligned with the amendments. We shall have to identify the differences between the Principal SOP Act and the
Amendment Bill and ensure that we are fully prepared, as a contractor in pursuing a payment claim and/or as a main
contractor in defending the payment certification. It would surely be exciting times ahead in this regard.
Source :
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Construction Knowledge
Can the project manager change the date of possession in the contract ?
It is sometimes thought that the architect can issue an instruction to the contractor to change the date of possession in the
contract. That view is misguided. The architect can issue only such instructions as are empowered by the terms of the con-
tract (e.g. clause 3.10 of SBC), and changing the date for possession is certainly not empowered by any clause in JCT con-
tracts. With the popularity of the project manager among clients, a slightly different view has taken hold that the project
manager can change the date of possession. This is consistent with the view that the project manager, simply on the basis
of his or her appointment, has wide powers under the contract. This view is, if anything, even more misguided.
The date for possession is one of the most important terms in the contract. The employer’s obligation is to give the con-
tractor possession of the site on that date (clause 2.4 of SBC, IC and ICD). Failure to give such possession is a serious
breach of contract unless the employer has exercised the right to defer possession.16 The status of a project manager is
not easy to define; the powers and duties are not obvious, they depend largely on the discipline of the project manager,17
but also on the terms of appointment. Usually, a project manager is appointed as the employer’s representative, rarely as
the contract administrator, and it is even rarer for the project manager to be given all the powers of the employer. Effec-
tively, therefore, the project manager, as normally appointed, does not even have power to enter site without the permis-
sion of the contractor or the authorisation of the architect.
Even if the project manager was appointed agent with full powers by the employer, the project manager would not have
the power to unilaterally change the date for possession; the employer does not have that power. Only the employer and
the contractor together may vary the terms of the contract.
Cases
Freeman & Son v Hensler (1900) 64 JP 260.
Pride Valley Foods Ltd v Hall & Partners (2000) 16 Const LJ 424.
(Source : Construction Contract Questions and Answers,
2nd Edition, David Chappel)
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