Eastern Oceanic Corporation Ltd v Orchard Furnishing House Building Company

• Jurisdiction: Singapore
• Judgment Date: 24 August 1965
• Date: 24 August 1965
• Docket Number: Civil Appeal No 102 of 1964
• Court: Federal Court (Singapore)

Eastern Oceanic Corp Ltd

Plaintiff

and

Orchard Furnishing House Building Co

Defendant

[1965] SGFC 12

Wylie CJ (Borneo)

,

Barakbah CJ (Malaya)

and

Wee Chong Jin CJ

Civil Appeal No 102 of 1964

Federal Court

Contract–Breach–Third party claims–Whether appropriate to order developer to give indemnity against claims by third parties for developer's breach of contract–Contract–Contractual terms–Contract for development of estate–Whether developer undertaking to construct sewerage mains–Standard of construction

The appellant undertook the development of a large housing estate (“the estate”), including the construction of roads, a septic tank and the requisite sewerage mains. The respondent agreed to buy 33 lots in the estate.

The issues on appeal were: (a) who should construct the sewerage mains from eight houses in the estate to the septic tank; and (b) the standard to which the estate roads should be constructed or altered. The High Court had held that the appellant was duty bound to construct the sewerage mains and that the roads should have been so constructed to the standard required to enable them to be taken over as public roads.

The appellant further contested the order of the High Court reserving certain heads of damages with respect to the appellant's failure to construct the roads to the necessary standard and to provide sewerage mains to serve the eight houses, contending that it would be more appropriate to order the appellant to indemnify the respondent in respect of any loss they might suffer from the appellant's defaults.

Held, dismissing the appeal:

(1) The agreement between the parties and the evidence clearly indicated an intention that the appellant was to construct the sewerage mains and to construct the roads to the standard required to enable them to be taken over as public roads: at [9], [10] and [16].

(2) As no claims for damages had been made against the respondent by purchasers of the houses due to the failure to construct the roads or to provide the relevant sewerage mains, the issue of an indemnity against damages arising from such possible claims should be reserved with liberty to apply for directions when the real issues could be determined and damages quantified: at [18].

Household Machines Ltd v Cosmos Exporters Ltd [1947] 1 KB 217 (refd)

Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 KB 297 (folld)

J Grimberg (Drew & Napier) for the appellant

Harry L Wee (C J Koh & Company) for the respondent.

Wylie CJ (Borneo)

(delivering the judgment of the court):

1 There are two points in issue in this appeal. The first is a dispute as to who should provide the sewerage mains necessary to lead refuse to a certain septic tank. During the hearing of the appeal, there was a certain amount of confusion as to whether the dispute was concerned with the connections to be made between an individual house and sewerage main, or whether it concerned the construction of the sewerage mains themselves. It is now common ground that the dispute is as to who should construct the sewerage mains necessary to convey the sewerage from eight houses to a certain septic tank and not with the cost of connecting each of these houses with the main once the latter is constructed. This septic tank was a second tank to be constructed on a housing estate because the first tank has proved inadequate.

2 The facts show that the appellant undertook the development of this large housing estate. The development included the construction of a septic tank and the requisite sewerage mains to serve the estate. By an agreement for sale and purchase dated 4 January 1962, the respondent agreed to buy 33 lots in that estate. The plan produced shows that the estate included many more lots than those sold to the respondent, and also other land. The sewerage mains shown on the plan include mains running over land not sold to the respondent (but in some cases serving lots that were sold to the respondent) and the agreement for sale and purchase does not give the respondent any easement over, or indeed any right at all in respect of, any land other than that purchased. If that had remained the position, there would be an overwhelming inference that the parties intended that the appellant would go on to complete the development of the estate so...