Goh Sin Huat Electrical Pte Ltd v Ho See Jui (trading as Xuanhua Art Gallery) and another

• Court: Court of Appeal (Singapore)
• Judge: Chao Hick Tin JA
• Judgment Date: 26 June 2012
• Neutral Citation: [2012] SGCA 32
• Citation: [2012] SGCA 32
• Hearing Date: 30 September 2011
• Subject Matter: Appeals,Civil Procedure,Tort,Contract
• Plaintiff Counsel: Cavinder Bull SC and Adam Muneer Yusoff Maniam (Drew & Napier LLC)
• Published date: 28 August 2012
• Defendant Counsel: Audrey Chiang Ju Hua and Lim Yew Kuan Calvin (Rodyk & Davidson LLP),Kelvin Poon Kin Mun and Melissa Kue (Rajah & Tann LLP)
• Date: 26 June 2012
• Docket Number: Civil Appeal No 61 of 2011

V K Rajah JA (delivering the grounds of decision of the court): Introduction

This appeal arose from the following undisputed facts. A water inlet hose (“the Water Inlet Hose”) which carried water to a water dispensing unit (“WDU”) located at the office of the second respondent, Liquid Advertising Pte Ltd (“Liquid Advertising”) ruptured. This resulted in water seepage into an art gallery situated directly below. The art gallery was owned and operated by the first respondent, Ho See Jui trading as Xuanhua Art Gallery (“Ho See Jui”). The water seepage extensively damaged the paintings displayed and stored in Ho See Jui’s Xuanhua Art Gallery (“the Art Gallery”). The WDU was supplied, installed and maintained by the appellant, Goh Sin Huat Electrical Pte Ltd. Ho See Jui commenced these proceedings against Liquid Advertising and the appellant in order to recover monies for the loss and damage sustained as a result of the water leakage from the rupture of the Water Inlet Hose. Both the trial and this appeal solely concerned the question of liability. Accordingly, evidence as to the quantum of damages suffered by Ho See Jui was not adduced.

The High Court Judge (“the Judge”) in Ho See Jui (trading as Xuanhua Art Gallery) v Liquid Advertising Pte Ltd and another [2011] SGHC 108 gave judgment in favour of Ho See Jui with costs to be borne by Liquid Advertising and the appellant. The Judge ordered that liability between Liquid Advertising and the appellant be apportioned in the following proportions: 30% to be borne by Liquid Advertising and 70% to be borne by the appellant. Further, as between Liquid Advertising and the appellant, it was ordered that the appellant indemnify Liquid Advertising in respect of their 30% liability to Ho See Jui. In effect, the appellant was held to bear 100% of the liability for Ho See Jui’s losses.

After considering the parties’ submissions, this appeal was partially allowed only with respect to the order of indemnity granted by the Judge. Thus, the apportionment of liability reverted to 70% to the appellant and 30% to Liquid Advertising. The costs order was also varied to reflect the percentage of liability borne by both parties. We now give the full reasons for our decision.

Background Personae Dramatis

Ho See Jui, the plaintiff and the first respondent in this appeal, is in the business of exhibiting and selling contemporary Chinese ink paintings which are traditionally painted on rice paper.

Liquid Advertising, the first defendant and second respondent in this appeal was at all material times the tenant of 70A Bussorah Street (“the Second Floor Unit”).

The appellant, the second defendant, was at all material times the sole local distributor of the “Frigeria” brand of WDUs, one of which was installed in the Second Floor Unit. The appellant was also responsible for repairing and maintaining the said WDU.

Facts

Ho See Jui was the tenant of the ground floor of a two-storey shophouse located at 70 Bussorah Street, Singapore 199483. Ho See Jui owned and operated the Art Gallery in the leased space where he displayed his traditional rice paper paintings. The Second Floor Unit which was leased by Liquid Advertising was located directly above the Art Gallery. On or about 2 April 2001, the appellant sold Liquid Advertising a “Frigeria” brand of WDU which was initially installed in Liquid Advertising’s previous office, located at 770A North Bridge Road, Singapore 198738.

On 2 September 2004, acting on Liquid Advertising’s request the appellant re-installed the WDU in the Second Floor Unit. In the course of the reinstallation of the WDU, the appellant also supplied a water inlet hose connecting the water mains in the Second Floor Unit to the WDU. For ease of reference, the area where the WDU was installed will henceforth be referred to as the “WDU Area”. It was common ground that the Water Inlet Hose carrying water to the WDU ruptured sometime between the evening of 24 September 2008 and the early morning of 25 September 2008. The water that leaked from the ruptured Water Inlet Hose seeped through the flooring of the Second Floor Unit into the Art Gallery. Ho See Jui alleged that the water that seeped into the Art Gallery damaged his paintings and the cabinet storing his paintings – this damage formed the basis of his action against Liquid Advertising and the appellant.

The reinstallation agreement

On 28 August 2004, shortly before relocating to the Second Floor Unit, Liquid Advertising entered into an agreement with the appellant for the latter to re-install the WDU at the new premises (“the Reinstallation Agreement”)¹. A quotation issued for the installation (“the Quotation”) contained the following clause (“the Quotation Warning”):

** PLS NOTE: THE PLACE WHERE THE WATER DISPENSER IS INSTALLED SHOULD HAVE A FLOOR TRAP, SO THAT WHEN THERE IS A LEAK IT WILL NOT FLOOD THE AREA. WE WILL NOT BE HELD RESPONSIBLE FOR ANY DAMAGES RESULTING FROM THE LEAKING OR FLOODING FROM THE FILER OR WATER DISPENSER.

We should add that it was not disputed that the WDU Area had timber flooring which could allow water to pass through its cracks. The maintenance agreements of the WDU

Liquid Advertising also entered into service and maintenance contracts with the appellant in August 2001 (“the First Maintenance Contract”)², on 11 December 2003 (“the Second Maintenance Contract”)³ and on 22 June 2005 (“the Third Maintenance Contract”)⁴ (collectively, “the Maintenance Contracts”). Pursuant to the First Maintenance Contract, the appellant maintained and serviced the WDU on four separate occasions between September 2001 and November 2002.⁵ The Third Maintenance Contract, valid from 22 June 2005 to 21 June 2007, stated that the WDU was to be serviced a total of eight times. In all, the WDU was serviced on 16 occasions. The last service was conducted on 16 September 2008, eight to nine days before the rupture of the Water Inlet Hose.⁶

Though not in the First Maintenance Contract, the Second and Third Maintenance Contracts contained the following clause (“the Disclaimer”):

DEAR CUSTOMER,

PLEASE BE INFORMED THAT THE INSTALLATION OF THE WATER COOLER AND/OR WATER DISPENSER SHOULD BE AT A WET PANTRY AREA. [THE APPELLANT] WILL NOT BE HELD RESPONSIBLE FOR ANY DAMAGES RESULTING FROM FLOODING OR LEAKING FROM THE WATER FILTER AND/OR WATER COOLER AND/OR WATER DISPENSER OR ANY DAMAGES FROM THE INSTALLATION OR REPAIR OR FAULT OF THE WATER COOLER AND/OR WATER DISPENSER.

The Disclaimer was also inserted in the appellant’s service orders which were issued for services carried out under the Maintenance Contracts, and in the service order issued for the reinstallation of the WDU at the Second Floor Unit. Summary of Pleadings

Ho See Jui raised three causes of action against Liquid Advertising in his claim for general and special damages. He successfully maintained claims in the tort of negligence, in the tort of private nuisance and under the rule in John Rylands and Jehu Horrocks v Thomas Fletcher (1868) LR 3 HL 330 (“Rylands v Fletcher”). Ho See Jui also pleaded two causes of action against the appellant; one in the tort of negligence and another in the tort of private nuisance. Specifically, Ho See Jui alleged that the appellant was negligent in: installing the Water Inlet Hose which was inherently unsuitable for the carriage of potable water and/or for use with the WDU; and providing and/or installing the Water Inlet Hose without ascertaining whether the Water Inlet Hose was suitable for use with the WDU. The appellant denied that it owed a duty of care to Ho See Jui or that it breached that duty for the following reasons: the appellant did not know that the carpeted flooring at the WDU Area was made of timber and that the WDU Area was located directly above Ho See Jui’s cabinet containing some of his paintings; the appellant was not responsible for the location where the WDU was installed; the appellant did not install the Water Inlet Hose; and the appellant additionally claimed that the Water Inlet Hose appeared to have been deliberately cut. Further, as with his claim against Liquid Advertising, Ho See Jui alleged that the appellant had created a nuisance by installing the WDU at an inappropriate location.

Notice of contribution or indemnity

On 8 December 2010, Liquid Advertising served a notice claiming contribution or indemnity against the appellant for any losses attributable to it from Ho See Jui’s claim. Liquid Advertising claimed that it was entitled to an indemnity or contribution because the appellant had breached various implied terms of the Reinstallation Agreement and the Maintenance Contracts in two aspects: first, Liquid Advertising took the position that the Water Inlet Hose was of an unsatisfactory quality and/or was not reasonably fit for its intended purpose; and second, Liquid Advertising claimed that the appellant did not perform its obligations under the Reinstallation Agreement and the Maintenance Contracts with reasonable care and skill, or at all.

The main arguments raised by the appellant in response to Liquid Advertising’s claim for an indemnity or contribution were as follows: first, the Maintenance Contracts expired before 24 September 2008 or the date of rupture of the Water Inlet Hose; second, under the terms of the Third Maintenance Agreement, the appellant did not take responsibility for the location of the WDU. Further, the appellant’s duties only concerned the WDU itself and not the Water Inlet Hose; third, the terms that Liquid Advertising claimed were implied into the Reinstallation Agreement and the Third Maintenance Agreement were not so implied because the Water Inlet Hose was not installed by the appellant; and fourth, and in the alternative, the appellant was entitled to rely on the Quotation Warning and the Disclaimer.

The decision below Cause of the rupture

The Judge...