Goodwill Building Resources Pte Ltd v Yue Cheong Kuan t/a Ben Design Architects and Another

• Jurisdiction: Singapore
• Judge: Tan May Tee
• Judgment Date: 31 October 2006
• Neutral Citation: [2006] SGDC 240
• Court: District Court (Singapore)
• Published date: 10 November 2006
• Year: 2006
• Plaintiff Counsel: Andrew J Hanam (Clifford Law Corporation)
• Defendant Counsel: Michael Por & Sheikh Mohamed Eusoff (Tan Lee & Partners)
• Citation: [2006] SGDC 240

31 October 2006

District Judge Tan May Tee:

Introduction

1 This case concerned the recovery of pure economic loss in tort. Since our Court of Appeal’s landmark decision in RSP Architects Planners & Engineers v Ocean Front Pte Ltd [1996] 1 SLR 113, this area of our law has significantly departed from the English position entrenched in the House of Lords’ ruling in Murphy v Brentwood District Council [1990] 2 All ER 908. The issue I had to determine will be of interest in particular to professionals in the building and construction industry – does an architect performing the role of a certifier owe a duty of care to the contractor with whom he has no contractual relationship? I answered this question in the affirmative which has led to the Defendants’ appeal in this case. However, on the facts and the evidence adduced before me at trial, I found against the Plaintiffs and accordingly dismissed their claim leading to their appeal against my findings. I set out herein the reasons for my decision.

The parties

2 Goodwill Building Resources Pte Ltd, the Plaintiffs in this action, were appointed the contractor for the construction of the building premises known as No. 405, 407, 409 and 411 Race Course Road. These are separate units in a 4-storey building with a shop at the first storey and two units of flats above it. Four separate lump sum contracts were signed with the respective owners on the Singapore Institute of Architects form of building contract, 6^th Ed, 1999 Reprint[note: 1] (hereinafter “SIA contract”). The owners, termed as ‘the Employer’ in the SIA contract appointed the 1^st Defendant, Yue Cheong Kuan, of Ben Design Architects as the architect for the building project pursuant to Clause 3 of the Articles of Contract[note: 2] (“the Architect”). The 2^nd Defendant was not involved in the project but was brought in as both Defendants are the partners of the firm of Ben Design Architects.

The proceedings and preliminary issue

3 The commencement date provided in the contract was 8 May 2001 and with the contract period stipulated as 10 months, the completion of the project was scheduled to be on 7 March 2002. It is common ground that the Plaintiffs completed the project on 23 September 2002. Upon the completion of the works, pursuant to the Conditions of the SIA contract, the Architect should have proceeded to issue the Completion Certificates, the Maintenance Certificates and then the Final Certificates so that the Plaintiffs as contractor could claim the payments due to them under the SIA contract. Up to 23 August 2005 when the Plaintiffs issued the writ in this action, these certificates had still not been issued.

4 The Plaintiffs contend that the delay by the Architect in coming up with the Final Payment Certificates had caused them to be deprived of payments that were due to them by the Employers. Because they had been kept out of funds due to them, this resulted in them incurring loss and expense by having to utilise their overdraft account and being charged commercial interest rates.

5 The Completion Certificates were issued only on 23 September 2005 after issue of the writ. With the Completion Certificates, the Architect also issued the Delay Certificates followed by the Maintenance and then the Final Certificates. The Plaintiffs however are unhappy with the certifications made by the Architect and seek declarations that the Certificates issued only recently are invalid.

6 The Plaintiffs’ cause of action against the Defendants was based on a duty of care owed to them by the Architect in the performance of his certification duties. It was the Defendants’ contention that no such duty is recognised in Singapore law and at the start of trial, Mr Michael Por, counsel for the Defendants, sought to have the court’s ruling on this point which he said would dispose of the matter without the need to proceed further. Mr Andrew Hanam, counsel for the Plaintiffs, objected to this course being taken. He argued that if the Defendants were so confident that the Plaintiffs had no cause of action, they should have acted earlier by filing an application to strike out the action under Order 18 rule 19, or even to have the matter determined pursuant to Order 14 rule 12. Instead, both parties had gone on to prepare for trial and the witnesses for both sides were present in court and ready to be cross-examined on their affidavits of evidence-in-chief.

7 I agreed with Mr Hanam. The Defendants had been advised by the same set of solicitors from the very outset. They should have taken out the necessary applications to have the issue of law determined before preparation for trial actually got underway. Although it was within the court’s discretion to proceed as suggested by Mr Por, I thought it was not cost-effective nor a judicious use of scarce court resources to utilise the first day of a 2-day trial for such an application as time would be taken up to consider the various authorities and should the court rule against the Defendants, both parties would be required to return to court subsequently for the trial. Inevitably, the parties would be put to more costs in relation to the advocates’ refresher as well as further attendance fees and court hearing fees. I therefore directed that the trial proceed and the issue of law be considered together with the evidence and submissions of the parties at the close of the case. This was on the basis of what I considered optimum case management. Had the court been alerted at pre-trial stage that the Defendants intended to apply for a ruling on a preliminary point of law, it would have provided the parties with a one-day hearing slot so that the matter could be argued and the further conduct of the case await the outcome of the ruling without any loss of court days. I also considered that the witnesses had set aside their time to give evidence on the hearing dates; to proceed as per Mr Por’s application would inevitably lead to an adjournment of the trial as far as the witnesses were concerned. Lawyers advising clients in civil proceedings should bear these considerations in mind and where an appropriate application may dispose of a matter without trial, this should be taken out as early as the rules of court allow in order to reap savings of costs for their clients as well as savings in terms of court resources which are funded on the public purse.

8 On the same note, I should also record the court’s displeasure at late interlocutory applications that are taken out by counsel and fixed to be heard by the trial judge on the day of trial. In the present case, the Plaintiffs had issued their writ in the Magistrate’s Court as the quantum of damages claimed being only $17,800 was well within the Magistrate’s Courts’ jurisdiction. Just before trial, Mr Hanam applied[note: 3] to have the Plaintiffs’ action transferred from the Magistrate’s Court to the District Court on account of the remedies prayed for in the Plaintiffs’ Amended Statement of Claim which were thought to be beyond the powers of the Magistrate’s Court. I granted the application, but not before hearing counsel’s arguments for about an hour. The suit originally numbered as MC 19883 of 2005 was thereafter designated DC 2381 of 2006. Such an application should have been dealt with prior to trial so as not to eat into the limited trial time.

The Pleadings – Plaintiffs’ case

9 The case framed by the Plaintiffs against the Defendants as appears from their Amended Statement of Claim, was as follows:

‘5. The Plaintiff completed the works on or about 23 September 2002 but the Defendant failed to issue a Completion Certificate, the Maintenance Certificate or the Final payment certificate.

6. Notwithstanding the above, the temporary occupation permit (“TOP”) was obtained on 9 January 2003 for No. 405, on 27 December 2002 for No. 407, on 23 December 2002 for No. 409 and on 15 January 2003 for No. 411.

7. The Plaintiff avers that the Defendant has beached their duty as a certifier to act independently and to issue the certificates within a reasonable time after the works were completed.

8 The Plaintiff avers that the Completion Certificate should have been issued on 23 September 2002, the Maintenance Certificate within 12 months thereafter on 23 September 2003 and the Final Payment Certificate within 3 months thereafter on 23 December 2003.

9 As a result of the Defendant’s failure to issue the Final Payment Certificate, the owners have not and are not required to make final payment to the Plaintiff and the Plaintiff has been deprived of their fees. Further the Plaintiff was put to loss and expenses by having to obtain loans at commercial rates in order to meet their financial obligations and expenses as a result of being kept out of their fees.

10 The Plaintiff submitted their final accounts to the Defendant on 9 December 2003 and 26 December 2003 and sought the Final Payment Certificate. Numerous reminders were sent by the Plaintiff for the Final Payment Certificate on 7 April 2004, 24 May 2004, 4 February 2005, and 11 March 2005 but the Defendant failed to provide the Final Payment Certificate. The Defendant in fact on 20 July 2004 wrote to say that it would be given “by the end of this week”. On 17 March 2005 the Defendant wrote to say that it would be given by 15 April 2005. As recent as 3 August 2005, the Plaintiff through their solicitors wrote to the Defendant for the Final Payment Certificate and were given until 11 August 2005 to issue the Certificates. Upon the Defendant’s request, the time was extended to 18 August 2005 for compliance. However, the Defendant has not provided the Final Payment Certificates at all.

11 After the commencement of proceedings, the Defendant on 23 September 2005 issued delay certificates in respect of the works alleging that the Plaintiff has caused delay in the completion of the works rendering the Plaintiff liable for liquidated damages to the owners. The Plaintiff avers...