Anwar Siraj and Another v The Tai Ping Insurance Co Ltd (Teo Hee Lai Building Construction Pte Ltd, Third Party)

• Judge: Aedit Abdullah
• Judgment Date: 03 January 2005
• Neutral Citation: [2005] SGDC 3
• Citation: [2005] SGDC 3
• Court: District Court (Singapore)
• Published date: 12 January 2005
• Plaintiff Counsel: Plaintiffs litigants in person
• Defendant Counsel: James Yu, Kuldip Singh and Jemy Ong (Yu and Co),S Thulasidas (Ling Das and Partners)
• Subject Matter: Conflict of Laws,Choice of law,Equity

3 January 2005

District Judge Aedit Abdullah:

1. The Plaintiffs claimed against the Defendants for various losses arising out of the failure by the Defendants to pay out a sum of money as required by a performance bond issued by the Defendants for the benefit of the Plaintiffs. I found that the claim was not made out and disallowed the Plaintiffs’ claim. The Plaintiffs have appealed, and I now give my full grounds of decision[1].

The General Facts

2. The Plaintiffs, who are husband and wife, had contracted on 30 December 1999 with the Third Party, a builder, to erect their home at Siglap Valley.

A performance bond was provided by the Third Party through the Defendants on 12 January 2000. The Defendants were also the insurers for the project.

3. A number of disputes arose between the Plaintiffs and the Third Party in respect of the work done. The attempted resolution of these disputes involved other persons such as the architect, the project engineer, and specialist surveyors or firms.

4. The Plaintiffs eventually made a call on the performance bond on 28 September 2001. The Defendants did not however pay the performance bond sum. An injunction was obtained on 12 October 2001 by the Third Party against the Plaintiffs, preventing them from making the call. This was eventually discharged on 14 January 2002, but an appeal was brought to the High Court, which restored the injunction on 31 January. From the High Court, an appeal was then brought to the Court of Appeal, which decided in favour of the Plaintiffs, and discharged the injunction on 24 October 2002. The performance bond sum was paid out in November 2002. A period of some 408 days had elapsed since the first call.

5. In the meantime, the Plaintiffs claimed that the condition of the property deteriorated. The cause and responsibility for such deterioration is in dispute between the parties. The Plaintiffs claimed against the Defendants the loss caused by this deterioration. The Defendants joined the Third Party.

6. In parallel, the Third Party and the Plaintiffs are involved in arbitration.

The Claim

7. The Plaintiffs’ statement of claim was substantially redrafted upon the direction of the Deputy Registrar. As the Statement of Claim stands it is not in the usual form and phrasing, but essentially, the Plaintiffs claimed in contract for losses and damages caused by the failure by the defendants to pay the performance bond sum when the call was made. These losses and damages included:

(a) fees for investigation by various specialists;

(b) architect’s, professional engineer’s, quantity surveyor’s, and pool specialists’ fees’

(c) costs arising from the deterioration of defects and electrical fittings;

(d) increase in the market price for rectification works;

(e) building materials needed to arrest the deterioration; and

(f) loss of use.

8. The Plaintiffs did claim the sum of $120,000 which was payable under the performance bond, but that sum has in fact been paid out following the Court of Appeal judgment. The Plaintiffs additionally claimed interest.

The Defence

9. The defendants denied causation of the loss, and claimed hat they were prevented from payment by the Third Party, who had informed them that the Third Party would look to them should any payment be made, as the Third party claimed that the Plaintiffs’ call was wrongful or unconscionable. It was contended that any damages or delay were a matter between the Plaintiffs and the third party. The defendants made the further point that the Plaintiffs should not be allowed to argue for damages which were being claimed by them against the Third Party in other proceedings.

The Third Party’s case

10. The Third Party denied being liable to the Defendants for damages, or that they were liable to indemnify the Defendants.

11. The Third Party was joined evidently to indemnify the defendants should the plaintiffs’ claim succeed. Issues between the defendants and the Third Party were not canvassed in this trial. The Third Party was permitted to question the Plaintiffs and their witnesses to ensure that the necessary areas were covered, should the matter proceed further for trial between the Defendants and the Third Party.

The Evidence Adduced

12. A number of witnesses were called by the Plaintiffs and the Third Parties. The defendants had only one witness. The Court highlighted its concern that substantial parts of the evidence concerned matters strictly pertaining to possible claims between the plaintiffs and the third parties. Some aspects certainly did touch possibly claims by the Defendants against the Third Party, but in light of my conclusions at the end of trial, these issues were in the event moot.

The plaintiffs’ witnesses

13. The Plaintiffs first called the Architect, Mr Tan Hock Beng, (PW1). In his affidavit 9PBA, he deposed as to the background leading to the dispute, the defects found, relating to water leakage, in the basement, the problems with underground pipes, and corroded electrical distribution boards. He also further deposed in 24 PBA as to the delamination of the wall plaster, the flooding in the basement and leaks in the swimming pool glass frame. In his third affidavit, 27 PBA, he deposed as to the response of the Third Party and cast doubt on the evidence of the Third Party’s expert, Mr Donald Payne. In his testimony in court, PW1 gave evidence that there were defects in the property, particularly as regards leakage in the basement. He was of the opinion that the damage to the property also resulted from deterioration. In cross examination, PW1 agreed that a number of aspects of the dispute had nothing to do with the defendants.

14. The Plaintiffs also called Mr Andrew Heng, PW2. He is the director of PCS Consultants Pte Ltd and a registered Quantity Surveyor. He deposed in 11 PBA (dated 24 March 2003) as to his engagement by the Plaintiffs to review the defects in the property. And in his reply affidavit, 28 PBA (dated 6 June 2003), he deposed matters in reply to the matters deposed by the Third Party’s expert, Mr Donald Payne.

15. PW2 testified that helped prepare the documents for the subsequent tender after the dispute arose. He similarly gave evidence of various defects and the conduct of the plaintiffs and third party in the dispute. Mr Heng accepted that it was fair to say that the defects in question existed before the call on the bond:

Q: Fair to say that these defects existed before call on the bond in September 2001?

A: I think it is fair. [NE page 30F]

16. PW3, Daniel Pang, is the Operations Manager of Scottscenter Pte Ltd, deposed in 12 PBA (dated 21 March 2003) the circumstances relating to the inspection of the pool. Scottscenter specialises in water treatment. He gave evidence as to the condition of the swimming pool and the defects associated with it, particularly leakage. There was fairly extensive questioning of PW3 as to the rate of leakage, and how he came to various conclusions about that rate of leakage. In his affidavit in reply, 30 PBA (dated 13 June 2003) PW3 deposed refutations concerning the Third party’s expert, Mr Donald Payne.

17. PW4 was Mr Lee Tat Sang, the consultant engineer. In 10 PBA, dated 24 March 2003, PW4 deposed as to the circumstances of his engagement, and the defects leading to the call on the performance bond, as well as the continued deterioration in the property. In 25 PBA dated 2 June 2003, PW4 further deposed as to a report by JPL Consultants, which was exhibited in the affidavit. In 29 PBA, a reply affidavit dated 13 June 2003, PW4 essentially refuted the evidence deposed by the Third Party’s expert. In court, PW4 gave evidence as to the defects in the property, such as swimming pool leakage, and defects in the waterproofing membrane.

18. PW5 and PW6 were the two plaintiffs themselves. They described the defects in the property. PW5, Mdm Norma Koh, deposed two affidavits, 14 PBA and 26 PBA. In 14 PBA, dated 25 March 2003, she described the circumstances of the dispute with the third party, the appointment of various experts (including some who did not testify), and damages incurred because of the failure by the Defendants to pay on the call. In 36 PBA, she deposed that the defendants had prior knowledge of the poor performance by the third party, the defects at handover, deterioration, and the failure of the defendants to appoint an expert or inspect the premises. In court, she testified that the plaintiffs did not expect the defendants to pay out the performance money when the injunctions were in place, but did expect payment during the periods when these were lifted [NE, page 82F]:

Q: You expect the deft to pay you performance money, when injunction proceeding?

A: We don’t expect, but there were periods when there were no injunctions. When demand was first made no injunction. They had promised to make payment when call was first made on 28 Sep 2001.

19. She further disagreed that she was suing the wrong party, testifying that if the money had been paid out, the plaintiffs would have been able to arrest the deterioration in the property. Much of her evidence was on the defects, and the difficulties faced by the plaintiffs in dealing with these defects and trying to obtain rectification by the Third Party, the contractor. The defendants had quite a number of statements puts to her concerning various aspects of the plaintiffs’ claim, but she remained adamant that the defendants were liable. PW5 also insisted that the defendants knew of the difficulties with the work as they were also the insurers and would have known of the difficulties because of claims made by the neighbours.

20. PW6 gave similar evidence as PW5. PW6 deposed one affidavit, 13 PBA, dated 25 March. Much of it concerned the defects arising in the property, the difficulties faced in dealing with the third party, as well as the efforts made after the defects were discovered.

Defendants’ witness

21. DW1 was a director in the non-motor claims...