Lian Kok Hong v Ow Wah Foong and Another

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeChan Sek Keong CJ
Judgment Date10 July 2008
Neutral Citation[2008] SGCA 30
Citation[2008] SGCA 30
Subject MatterSections 6, 24A(3) Limitation Act (Cap 163, 1996 Rev Ed),Action in contract and tort against architects for wrongfully issuing termination certificate,Whether time began to run from date of accrual of cause of action or date house owner had knowledge of architects' negligence in issuing termination certificate,When time begins to run,Limitation of Actions
Plaintiff CounselOommen Mathew (Haq & Selvam) and Prabhakaran Nair (Ong, Tan & Nair)
Defendant CounselAndrew Tan and Anna Png (Andrew Tan Tiong Gee & Co)
Docket NumberCivil Appeal No 123 of 2007
Published date23 July 2008
Date10 July 2008

10 July 2008

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

Introduction

1 This appeal raised interesting issues about the commencement of the limitation period in relation to a claim for breach of contract that purportedly resulted in latent damage. This in turn necessarily posed the questions: What is latent damage? When does the limitation period for actions associated with such damage (if accepted as constituting a distinct type of damage) commence? In addition, these proceedings also featured the very real conundrum of how best a claimant ought to protect itself in a multi-party contractual matrix if there is a difference in views in relation to which party it might successfully recover damages from.

2 It would perhaps be apposite to preface these grounds of decision by reproducing the incisive observations of Lord Scott of Foscote in Haward v Fawcetts [2006] 1 WLR 682 (“Haward”) at [32]:

[I]n prescribing the conditions for the barring of an action on account of the lapse of time before its commencement, Parliament has had to strike a balance between the interests of claimants and the interests of defendants. It is a hardship, and in a sense an injustice, to a claimant with a good cause of action for damages to which, let it be assumed, there is no defence on the merits to be barred from prosecuting the cause of action on account simply of the lapse of time since the occurrence of the injury for which redress is sought. But it is also a hardship to a defendant to have a cause of action hanging over him, like the sword of Damocles, for an indefinite period. Lapse of time may lead to the loss of vital evidence; it is very likely to lead to a blurring of the memories of witnesses and to the litigation becoming even more of a lottery than would anyway be the case; and uncertainty as to whether an action will or will not be prosecuted may make a sensible and rational arrangement by the defendant of his affairs very difficult and sometimes impossible. Each of the various statutes of limitation that over the years Parliament has enacted, starting with the Limitation Act 1623 and coming down to the 1980 Act, represents Parliament’s attempt to strike a balance between these irreconcilable interests, both legitimate. It is the task of the judiciary to identify from the statutory language and the purpose of each amending enactment the balance that that enactment has endeavoured to strike and to apply the enactment accordingly. It is emphatically not the function of the judges to try to strike their own balance, whether as a response to the apparent merits of a particular case or otherwise. In A’Court v Cross (1825) 3 Bing 329 Best CJ, commenting on the 1623 Act, said at p 331, that he was “sorry to be obliged to admit that the courts of justice [had] been deservedly censured for their vacillating decisions” and went on:

“When by distinctions and refinements, which, Lord Mansfield says, the common sense of mankind cannot keep face with, any branch of the law is brought into a state of uncertainty, the evil is only to be remedied by going back to the statute ...”

[emphasis added]

Judges would do well to heed this salutary reminder when they have to assess the competing tensions between justice and certainty and finality invariably present in cases where statutory limitation defences are raised.

3 This was an appeal against the decision of the High Court Judge (“the Judge”) who dismissed the appellant’s claims in contract and negligence against the respondents on the preliminary issue that such claims were time-barred under s 24A(3)(b) of the Limitation Act (Cap 163, 1996 Rev Ed). The Judge’s decision is reported as Lian Kok Hong v Ow Wah Foong [2007] 4 SLR 742 (“the Judgment”). After hearing counsel, we dismissed the appeal. We now set out our detailed reasons for having so decided.

4 At the outset, it should perhaps also be mentioned that an application by the respondents to have the appellant’s amended writ of summons and statement of claim struck out (on the basis that the actions contained therein were time-barred) had been initially allowed by an assistant registrar. Surprisingly, that decision was subsequently reversed by a different High Court judge on the basis that the appellant’s level and degree of knowledge could only be ascertained after a full trial. For reasons that follow, we unhesitatingly came to the view that the present action ought to have ended with the assistant registrar’s decision. The Judge, quite correctly, decided to resolve the time-bar issue before a full trial thus indirectly affirming the position taken earlier by the assistant registrar. We now set out the material facts.

The facts

Events prior to the present proceedings against the respondents

5 The appellant had engaged Sin Kian Contractors (“the Contractor”) to build a house for him (“the Project”) on the terms of a contract dated 29 August 1997 (“the Contract”). On 3 March 1999, the appellant complained of various defects and asked the Contractor to rectify them. The Contractor refused to carry out the requisite rectification works, whereupon the appellant called for a meeting with his consultants, including the respondents, who were his architects for the Project. As a result of this meeting, the appellant indicated to the respondents that he had decided to terminate the Contractor as the main contractor for the building project. The respondents then issued a termination certificate dated 17 March 1999 (“the Termination Certificate”) to the Contractor, certifying that the appellant was entitled to terminate the Contractor’s employment on the grounds stated in paras (d), (e) and (h) of cl 32(3) of the Contract. Following this, the appellant terminated the Contractor’s employment by way of a letter dated 19 March 1999 (“the Notice of Termination”).

6 By a letter dated 22 March 1999, the Contractor disputed the validity of the Termination Certificate issued by the respondents as well as the Notice of Termination written by the appellant. The Contractor concurrently notified the appellant of its intention to initiate arbitration proceedings. The respondents conferred with the appellant on 23 April 1999, affirming that the Termination Certificate was properly issued. However, the respondents went on to inject a note of caution that the Termination Certificate might be challenged on the ground that it did not comply with cll 32(3)(d), (e) and (h) of the Contract. The matter proceeded to arbitration, where the arbitrator ultimately ruled against the appellant, making an interim award on 7 April 2003 and issuing the final award on 21 July 2006. The arbitrator found that the Termination Certificate was procedurally incorrect and in breach of cll 32(3)(e) and 32(3)(h) of the Contract.

Present proceedings against the respondents

7 The appellant commenced the present proceedings against the respondents by filing a writ of summons on 17 March 2006. According to the amended writ of summons and statement of claim filed on 21 March 2006 (“the Amended Statement of Claim”), the appellant alleged (at para 7) that the respondents were “guilty of a breach of [their] contract of employment and the … terms, conditions, and warranties thereof and were guilty of negligence in the performance of their … services”. In greater detail, the Amended Statement of Claim[note: 1] (at para 7) particularised the alleged breaches in contract and negligence on the part of the respondents as follows:

(a) They failed to exercise closer supervision and more frequent inspection of the finishing works at the [Project] in the course of such work given that there was no architectural clerk-of-works employed to be full time on site to ensure that the standard was maintained for all architectural work including the tiling works. As a result, unsatisfactory and unacceptable work carried out by the Contractors was not addressed earlier in the course of the works;

(b) They certified that the wall and ceiling finishes were 96.8% completed and the floor finishes 98.15% [completed] as at the end of December 1998 without taking into consideration the quality of tiling works carried out by the Contractors. They should not certify payment for such work based only on physical completion of such work. If work has not been properly done and carried out, they should not have certified payment for such work.

(c) They issued the Termination Certificate against the said Contractors without exercising due care and diligence to ensure that there were valid grounds to do [so]. They insisted

(i) that the Contractors submit a defects rectification schedule when in fact it was not necessary for the Contractors to do so since the [respondents] had issued an extension of time to the Contractors to complete all work including rectification works by 28 April 1999;

(ii) on an unreasonable standard of tiling work of the Contractors without taking into consideration industrial standards for such work. The [respondents] are therefore not justified in issuing the said Termination Certificate based on this ground; and

(iii) that the Contractors were in breach of contract for failing to comply with the [respondents’] direction or instruction despite being given the requisite one month’s written notice to do so. The [respondents] wrongfully insisted that the Contractors submit a schedule of rectification works within one (1) month of 5 February 1999 and when the latter failed to do so, the [respondents] wrongly justified issuing the Termination Certificate on this ground. This is also notwithstanding that the [respondents] had given the extension of time stated in (i) above.

(d) They issued the said Termination Certificate without exercising due care and diligence to ensure the requisite procedural requirements in particular the requisite notices under clause[s] 32(3)(e) and (h) of [the Contract], have been complied with.

8 As mentioned earlier, the respondents applied to strike...

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