LAW303: Business Law BUSINESS LAW CASE STUDIES PROJECT FRANK &NATHAN HONG CONSTRUCTION PTE LTD Frank recently purchased on January 2021 an old pre-war two-story corner terrace shophouse at 435 East Coast which was in a dilapidated condition. His intention was to turn the property into a residential dwelling/business premises. He planned to stay at the 2nd/3rdfloors and t

BUSINESS LAW CASE STUDIES PROJECT

• FRANK &NATHAN HONG CONSTRUCTION PTE LTD

Frank recently purchased on January 2021 an old pre-war two-story corner terrace shophouse at 435 East Coast which was in a dilapidated condition. His intention was to turn the property into a residential dwelling/business premises. He planned to stay at the 2nd/3rdfloors and to let out the ground floor to Woon Li who wanted to run a Peranakan Restaurant as there was only one such restaurant in Katong. The adjacent houses in the vicinity were all eateries that were well patronized at night and during weekends.

Frank previously worked as GM of Leong Brothers Construction Company, a small & medium-sized company as its Chief Operating Officer though he was the company’s accountant. He had hands-on experience in managing construction projects as he did a Diploma in Building with Singapore Polytechnic.

Frank signed a Design & Build Contract with Nathan Hong for renovating the property costing Singapore dollars $800,000. The contract was modeled on the Singapore Institute of Architect (SIA) model project agreement. He paid $200,000 as of the initial payment for the project. Nathan Hong his contractor is a member of the Real Estate Developers’ Association of Singapore (REDAS).

The key provisions in the contract specified the following:

1. The entire two-story shophouse was to be demolished and in its place, a three-story structure was to be erected.
2. The ground floor had to have a high ceiling for ventilation purposes as a restaurant
3. The roof structure was to be changed to Dormer roof from Skillion and Lean-To roof structure
4. The roof tiles comprise Bogener-Dachziegel premium red englobed color titles. Frank was very particular not only about the quality of the titles but his geomancer Woon had told him that for better feng shui he has to use red color tiles. The red color bricks with the three-story corner shophouse would look prominent where most of the other shophouses comprise two-story shophouses.
5. The dwelling premises were to be parquet flooring size 1220 x 180mm with 5mm thickness and wear layer of 0.5mm
6. Walls to be well plastered and painted oak white with Nippon Easy Wash color paint
7. Titles on the ground floor were to be anti-skid vitrified that are durable and can withstand heavy traffic.
8. The wall of the ground floor was to have German 3MTM DI-NOCTM Architectural Finishes which help preserve rare and exotic woods and requires no harsh chemical to maintain allowing the use of eco-friendly cleaners.

4 Because Frank wanted a high floor ceiling for the ground floor, Aung the Project Engineer from Nathan Hong wrote to Frank on 29 March 2021 telling him that due to design constraints the Dormer roof type had to be changed to Hip roof. He also wrote that 50% of Nathan Hong’s workers had contacted COVID 19 and the construction project will be delayed by 2 months.

Frank was given up to 12th April to respond failing which the submissions will be submitted to BCA. Frank acknowledged the delay but still wanted the roof to be Dormer type. He posted the letter through the normal post but it was lost in the post. Since there was no response from Frank, Aung submitted the Design & Build plan to BCA on 13th April 2021. 5 After the Temporary Occupation Premises license was granted, Frank got an architectural firm, Nan Architects to do a study of the overall project.

The study indicated the following:

1. The Hip roof was feasible given the requirements of the project
2. The color of the titles was as specified per contract but the titles were natural red
3. The walls on the residential premises were ripping off because of poor constituents of the concrete plaster and poor workmanship
4. The paint was not Nippon Easy Wash color paint but a cheaper paint from a competitor
5. The parquet floors were uneven though they were of the specifications but were very uneven because the floor was uneven and
6. Titles at the ground floor were to be anti-skid vitrified were durable and can withstand heavy traffic However, they were made in India which Frank objected to being used