3. Pursuant to the Meetings, parties have reached an agreement on the following:

a. [The Plaintiff] will complete the remaining works under the Sub-Contract, including but not limited to the dismantling of formwork, material clearance and defect clearance, in accordance with the “RC Works Completion Schedule and Manpower Mobilization Plan” at Annex A hereto;

b. [The Plaintiff] will mobilize its workers to complete the works pursuant to paragraph 3(a) above, in accordance with the “RC Works Completion Schedule and Manpower Mobilization Plan” at Annex A hereto;

c. Upon [the Plaintiff] signing of this Supplementary Sub-Contract Agreement, [the 1st Defendant] will make payment of the sum of S$550,000 (inclusive of GST) which was certified under Payment Certificate No. 21 (Revised) issued for the month of April 2015 work done by [the Plaintiff]. Subsequently, [the 1st Defendant] will issue a Payment certificate on 20 July 2015 for another amount of S$300,000 (inclusive of GST) for work done by [the Plaintiff] for the whole of remaining RC Works. This subsequent payment will be made within the period of 10 August 2015 to 20 August 2015;

d. Upon the issuance of the $300,000 amount payment certificate as above-mentioned in paragraph 3(c), the previous Payment Certificate No. 22 that was issued by [the 1st Defendant] to [the Plaintiff] for the sum of S$73,326.97 (inclusive of GST) for the month of May 2015 work done shall be withdrawn by mutual consent of [the 1st Defendant] and [the Plaintiff];

e. Apart from the payment under paragraph 3(c) and 3(d) above, [the 1st Defendant] will not be obliged to make any further payment to [the Plaintiff], and [the Plaintiff] will not be entitled to make any further claims against [the 1st Defendant], until the Final Payment Certificate is issued in accordance with the Sub-Contract after the Final Account Agreement;

f. [The Plaintiff] will extend the validity period of Performance Bond No. BPBSN0006711300 (“Performance Bond”) to 09 October 2015 as per [the 1st Defendant’s] previous letter (ref. no. HD/SGAWA/D/SLE/2015-149 dated on 09 June 2015) and all other terms of the Performance Bond will remain the same;

20. … it was the understanding that pending the finalisation of the accounts for the Final Accounts Agreement, there shall be no call on the Performance Bond.

13. It was on 29.06.2016 or 30.06.2016 that the Understanding was reached between myself and the 1st Defendant’s Mr J.H. Park, that the 1st Defendant would not call on the Bond. I would certainly have refused to renew the Bond if the 1st Defendant did not agree to the Understanding. In any case, the existence of the Understanding can be gleaned from the circumstances, and is clearly implicit in the arrangement reached between the parties. I would not be so foolish as to, on the one hand, agree to sit down with the 1st Defendant to discuss and agree on the Final Account, while on the other hand allow the 1st Defendant to have the liberty of calling on the Bond in the meantime. At that time, I had no reason to distrust Mr J.H. Park’s words, and therefore did not query the 1st Defendant as to why the Understanding was not reflected in the 1st Defendant’s letter dated 30.06.2015 …

52. … the main purpose of the meetings was to address the fact that the Plaintiff was behind schedule in carrying out the Sub-Contract Works, the Plaintiff’s threats to stop the Sub-Contract Works, as well as the Plaintiff’s request for more payment.

53. On 29 and 30 June 2015, Pan and Zhang met with Kim and me at the 1st Defendant’s office to discuss the Construction Program for the remaining Sub-Contract Works, the Manpower Mobilization Plan as well as the payment schedule. The Plaintiff reiterated their request for more payment and stated that they would stop the Sub-Contract Works if they did not receive monies from the 1st Defendant. After much discussion, parties eventually reached an agreement on the payment schedule, the Construction Program as well as the amount of manpower that was required to be mobilized. This agreement was embodied in the Supplementary Sub-Contract Agreement dated 30 June 2015 …

54. It is clear from the terms of the Supplementary Sub-Contract Agreement that the main purpose of the agreement was to give the Plaintiff more time to carry out the works. In the Supplementary Sub-Contract Agreement, new target dates to complete the outstanding works were set as the Plaintiff was unable to meet the original dates. …

…

86. It is significant to note that the Plaintiff had never even written to the 1st Defendant to record this alleged “Understanding” or to put on record their objection that the “Understanding” was not embodied in the Supplementary Sub-Contract Agreement.

[The 1st Defendant] may, in lieu of giving a notice of termination under this Clause, take whole or a part of the Sub-Contract Works out of the hands of the [Plaintiff] and may by himself, his servants or agents execute, complete and maintain such part and in such event the [1st Defendant] may recover his reasonable costs of so doing from the [Plaintiff], or deduct such costs from monies otherwise becoming due to the [Plaintiff].

18 It is settled law that unconscionability, as distinct from fraud, is a ground upon which the court can grant an injunction restraining a beneficiary of a performance bond from calling on the bond …

19 The elements of unconscionability are also fairly uncontroversial, and have been variously stated to include elements of abuse, unfairness and dishonesty …

20 Of greater significance in the context of the present appeal is the necessary threshold of unconscionability that has to be established before the court will exercise its discretion to grant an injunction. … It is important to note, at the outset, that the law in this regard is settled. Simply put, the threshold is a high one, and the burden that the applicant has to discharge is to demonstrate a strong prima facie case of unconscionability …

21 When determining if a strong prima facie case has been made out, the entire context of the case must be thoroughly considered, and it is only if the entire context of the case is particularly malodorous that such an injunction should be granted. We must emphasise that the courts’ discretion to grant such injunctions must be sparingly exercised and it should not be an easy thing for an applicant to establish a strong prima facie case.

…

25 … the courts should be slow to upset the status quo and disrupt the allocation of risk which the parties had decided upon for themselves in a building contract …

We do not think it is possible to define “unconscionability” other than to give some very broad indications such as lack of bona fides. What kind of situation would constitute unconscionability would have to depend on the facts of each case. This is a question which the court has to consider on each occasion where its jurisdiction is invoked. There is no pre-determined categorisation.

12. If an Erinford Order is not granted, the 2nd Defendant would proceed to pay the 1st Defendant the sum of $404,035.01, and the 1st Defendant would receive the said sum. Clearly, the Plaintiff would be denied its primary remedy in the event that its appeal is successful.

13. Further, the Plaintiff has placed with our firm an amount of $416,035.01, being the sum of the performance bond amount of $404,035.01 and the costs of $12,000 awarded to the 1st Defendant on 1 July 2016. We have by letter dated 8 July 2016 to the 1st Defendant’s solicitors (and copied to the 2nd Defendant), informed that:-

13.1. We are prepared to furnish our firm’s undertaking to release the sum of $416,035.01 to the 1st Defendant in the event the Plaintiff’s appeal is unsuccessful;

13.2. If required by the 1st Defendant, the sum could be placed in an interest-earning fixed deposit account;

13.3. The 1st Defendant would therefore be assured of receiving payment in the event the appeal is unsuccessful; and

13.4. Pending the disposal of the appeal, the 1st Defendant would therefore not require payment from the 2nd Defendant on the performance bond.

…

17. On the other hand, the Plaintiff will suffer substantial prejudice if an Erinford Order is not granted, and the Plaintiff is eventually successful in its appeal. We are instructed that it is common practice in the building and construction industry that parties tendering for projects will be asked to disclose if any performance bonds furnished by them had been called and paid on previously. A response in the affirmative will most certainly prejudice a party’s chances of securing the project tendered for. Any loss suffered by the Plaintiff in this regard cannot be compensated in any way.

… where the application is for an injunction pending an appeal, the question is whether the judgment that has been given is one upon which the successful party ought to be free to act despite the pendency of an appeal. One of the important factors in making such a decision, of course, is the possibility that the judgment may be reversed or varied. Judges must decide cases even if they are hesitant in their conclusions; and at the other extreme a judge may be very clear in his conclusions and yet on appeal be held to be wrong. No human being is infallible, and for none are there more public and authoritative explanations of their errors than for judges. A judge who feels no doubt in dismissing a claim to an interlocutory injunction may, perfectly consistently with his decision, recognise that his decision might be reversed, and that the comparative effects of granting or refusing an injunction pending an appeal are such that it would be right to preserve the status quo pending the appeal. I cannot see that a decision that no injunction should be granted pending the trial is inconsistent, either logically or otherwise, with holding that an injunction should be granted pending an appeal against the decision not to grant the injunction, or that by refusing an injunction pending the trial the judge becomes functus officio quoad granting any injunction at all.

There will, of course, be many cases where it would be wrong to grant an injunction pending appeal, as where any appeal would be frivolous, or to grant the injunction would inflict greater hardship than it would avoid, and so on. But subject to that, the principle is to be found in the leading judgment of Cotton L.J. in Wilson v. Church (No. 2), 12 Ch.D. 454, where, speaking of an appeal from the Court of Appeal to the House of Lords, he said at p. 458, “… when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory.”

[emphasis added]