CST Cleaning & Trading Pte Ltd v National Parks Board

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeChan Sek Keong CJ
Judgment Date22 August 2008
Neutral Citation[2008] SGHC 140
Citation[2008] SGHC 140
Subject MatterIndemnity clause,Statutory Board incurring liability as result of concurrent negligence and occupier's liability,Whether indemnity clause applying to situation of concurrent causes and extent of indemnity available to statutory board,Agreement between contractor and statutory board to indemnify statutory board against liability,Contract,Rules of construction,Contractual terms
Published date27 August 2008
Defendant CounselRamesh Selvaraj (Allen & Gledhill LLP)
Docket NumberDistrict Court Appeal No 5 of 2008
Date22 August 2008
Plaintiff CounselLetchamanan Devadason (Steven Lee Dason & Khoo) and Mahtani Bhagwandas (Harpal Mahtani Partnership)

22 August 2008

Judgment reserved.

Chan Sek Keong CJ:

1 This is an appeal by CST Cleaning & Trading Pte Ltd (“the Contractor”) against the judgment of the district judge (“the District Judge”) in District Court Suit No 1111 of 2005 (“the DC Suit”) in which he ordered the Contractor to pay to the National Parks Board (“the Board”) the sum of $114,270.52 with interest and costs pursuant to the terms of an indemnity given by the Contractor to the Board (see National Parks Board v CST Cleaning & Trading Pte Ltd [2008] SGDC 7).

The background facts

2 The Contractor is a cleaning contractor. The Board is a statutory board whose functions include, inter alia, the maintenance of public parks in Singapore. The Pasir Ris Park (“the Park”) is one of such parks. By a contract dated 23 October 1998 (“the Contract”), the Contractor agreed to provide cleaning services to the Park subject to the terms contained therein.

3 On 5 December 1999, a young boy, Liew Yu Wei (“Liew”), was cycling on a footpath at the Park when he collided with a lorry travelling on the same footpath and suffered injuries. The lorry was driven by one Ang Cheng Chai (“Ang”), who was an employee of the Contractor’s subcontractor, Tan Tai Sang Pte Ltd (“the Subcontractor”).

4 As a result of his injuries, Liew commenced an action in Magistrate’s Court Suit No 1693 of 2001 (“the MC Suit”) for damages against: (a) the Board for negligence and/or occupier’s liability as the occupier of the Park; (b) the Contractor in vicarious liability for the negligence of the Subcontractor; and (c) the Subcontractor as the employer of the lorry driver, Ang, whose negligence had caused the injuries to Liew. The magistrate who heard the MC Suit (“the Magistrate”) found that the Board and the Subcontractor, though not acting in concert, had committed a tort contemporaneously and caused the same or indivisible damage, with each liable for the whole damage, which the Magistrate later apportioned at 50% for each party. The Board was found liable qua occupier of the Park or, alternatively, qua joint tortfeasor with the Subcontractor in negligence for causing Liew’s injuries.

5 Liew’s claim against the Contractor in vicarious liability for the Subcontractor’s acts was dismissed on the ground that the Subcontractor was an independent contractor of the Contractor.

6 Pursuant to the judgment in the MC Suit, the Board paid Liew the entire amount of damages awarded to Liew amounting to $98,161.39 for which the Board was wholly liable by virtue of it having been found jointly liable with the Subcontractor (see Oli Mohamed v Murphy [1969-1971] SLR 270 at 272, [10] and Wong Jin Fah v L & M Prestressing Pte Ltd [2001] 4 SLR 529). The Board also paid the Contractor the sum of $16,109.13, being 50% of the taxed costs and court fees pursuant to the judgment in the MC Suit. The total loss thus suffered by the Board amounted to $114,270.52.

The DC Suit

7 Having paid out the entire amount under the judgment in the MC Suit and 50% of the costs to the Contractor, the Board then commenced an action in the DC Suit against the Contractor for an indemnification of the amount of $114,270.52, under cl 22(a) of the Contract, which reads:

The Contractor shall be liable for and shall indemnify the Board in respect of any liability, loss, claim or proceedings whatsoever arising under any statute or common law in respect of personal injury to or death of any person whomsoever arising out of or in the course of or by reason of the execution of the Works provided that the same is due to any negligence, omission or default of the Contractor, his servants or agents or any sub-contractor, his servants or agents. [emphasis added]

8 The Board’s case before the District Judge was based on a literal reading of the words of cl 22(a): the Board had suffered a loss of $114,270.52 in respect of the personal injury to Liew arising out of or in the course of or by reason of the execution of the contract works and the same, ie, the personal injury to Liew, was due to the negligence of the Subcontractor’s servant, Ang, and the Contractor was thus liable for the loss for which it had to indemnify the Board. The Board contended that its claim to be indemnified fell squarely and clearly within the words of the indemnity clause.

9 The Contractor’s defence was equally simple: it was that the indemnity was intended to cover the situation where the Board, as an employer, was made liable for any personal injury arising from the execution of the contract works for which it was not itself negligent. In other words, the indemnity was intended to cover the Board’s vicarious liability and not the Board’s own liability in negligence. Here, the Board was held liable to Liew for its own negligence in occupier’s liability, and therefore cl 22(a) did not cover such a liability. Furthermore, there was an ambiguity in the indemnity clause, which should be construed against the proferens (ie, the Board) under the contra proferentem rule of construction.

10 The District Judge accepted the submission of the Board. He held that on its natural and ordinary meaning, the indemnity clause applied. The Board had suffered a loss and it was due to the negligence of the Subcontractor’s servant in causing injury to Liew. The District Judge rejected the Contractor’s argument that the contra proferentem rule applied because there was no ambiguity in the words of the indemnity clause. He held that reading the words as not being applicable to a situation where the Board itself was negligent would require him to rewrite the indemnity clause or read into it extra words that were not there. The District Judge was of the view that the commercial purpose of indemnity clauses like cl 22(a) was to provide employers with full protection irrespective of who was negligent so long as the employer suffered a loss or incurred a liability because of the contractor, its subcontractor or their respective agents and servants.

The Contractor’s arguments on appeal

11 The Contractor’s arguments before me were basically a reiteration of its arguments before the District Judge. Its counsel contended that the District Judge had failed to give effect to the proviso (ie, the emphasised words at [7] above) in the indemnity clause and had turned the Contractor into an insurer for the Board. He reiterated that the indemnity clause had no application unless the Board was held liable for the negligence of the Contractor, the Subcontractor or their respective servants or agents, but here the Board was held liable for its own negligence. In other words, the indemnity was intended to cover the vicarious liability of the Board and not its own direct liability.

The Board’s arguments on appeal

12 The Board’s arguments before me were also a reiteration of its arguments before the District Judge. However, counsel for the Board further argued that the Board was seeking only to be indemnified for the loss and liability incurred by the Board that were factually attributable to the Subcontractor’s servant, Ang. The argument was that, but for the initial negligent act of the Subcontractor’s servant, the Board could not and would not have been sued in the first place, as the collision would not have occurred. The Board referred to the decision of the English High Court in Hosking v De Havilland Aircraft Co, Ltd [1949] 1 All ER 540 (“Hosking”) in support of its argument.

The case of Hosking

13 In Hosking, the employer had engaged contractors to carry out building works on a plot of land adjacent to its factory. The contractors had dug a hole into the ground in order to lay pipes under the land. They placed a plank across the hole so that workmen could cross from one side to the other. The plaintiff, an employee of the occupiers of the factory, was crossing the plank in the course of his work when the plank broke. The plaintiff fell into the hole and suffered injuries. The employer was held liable for breach of its statutory duty under the Factories Act 1937 (c 67) (UK) for failing to ensure that the plank was of sound construction and properly maintained and for failing to provide a safe means of access. In third-party proceedings, the employer claimed to be indemnified by the contractors under the following indemnity clause in the contract between the parties:

The contractor shall be solely liable for and shall indemnify the employer in respect of and shall insure against any liability, loss, claim or proceedings whatsoever arising under any statute (other than the Workmen’s Compensation and Employers’ Liability Acts) or at common law in respect of personal injury to or the death of any person whomsoever arising out of or in the course of or caused by the execution of the works, unless due to any act or neglect of the employer or of any person for whom the employer is responsible. [emphasis added]

14 Lewis J held that, although the occupiers of the factory were liable to the plaintiff for breach of statutory duty, they were still entitled to claim the indemnity against the contractors. Lewis J, in construing the indemnity clause, said at 542–543:

The result, in my view, is that the occupiers are liable, but that by no means concludes the case. The contractors were the persons who put down a rotten plank to be used both by their own people and by those employed by the occupiers, and, in my...

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