Pars Carpet Gallery Pte Ltd v Marina Centre Holdings Pte Ltd

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 12 December 1996
• Neutral Citation: [1996] SGHC 287
• Docket Number: District Court Appeal No 19 of
• Date: 12 December 1996
• Year: 1996
• Published date: 19 September 2003
• Plaintiff Counsel: Liew Teck Huat (Niru & Co)
• Citation: [1996] SGHC 287
• Defendant Counsel: Chan Hock Keng (Bih Li & Lee)
• Court: High Court (Singapore)
• Subject Matter: Tenant's goods are damaged by water coming through false ceiling above shop,Water is caused by negligence of landlord's agents or servants,Contractual terms,Whether the exclusion clause in tenancy agreement exempts landlord,Contract,Tenancy agreement,Exclusion clauses

The plaintiffs are a company dealing in ornamental carpets and rugs. The defendants are the owners of the Marina Square development at Raffles Boulevard. Under a tenancy agreement, the plaintiffs leased from the defendants a shop unit on the third level of the shopping centre, which is part of the development, for a period of three years commencing on 1 March 1991, for use by the plaintiffs as an office and showroom for the display of their goods.

On the morning of 17 April 1992, which was a public holiday (Good Friday), an accident happened, in which water came through the false ceiling above the plaintiffs` shop and damaged a substantial portion of the plaintiffs` stock of carpets and rugs. It was subsequently established that the water which damaged the plaintiffs` stocks was pressurised chilled water from a pipe forming part of the air-conditioning system of the complex under the control of the defendants. The pipe was suspended from the concrete slab within the ceiling void above the plaintiffs` shop. The metal rods holding the pipe had given way, and the pipe sagged. The resultant stress caused a joint of the pipe to be dislodged, allowing the pressurised water to escape.

In a suit brought in the plaintiffs` name (I understand by insurers by subrogation) claiming damages for the loss sustained by the plaintiffs, the learned district judge Miss Jasvender Kaur found that the escape of the pressurised water was due to the negligence of the defendants. However, her honour held that cl 36.1(b) of the tenancy agreement exempted the defendants from liability for their negligence, and she accordingly dismissed the plaintiffs` claim.

There is no appeal against the finding of negligence. The sole question before me on this appeal is whether the learned district judge was correct in holding that cl 36.1(b) of the tenancy agreement applied so to exempt the defendants from liability for their negligence. The arguments centre around the application of the `tests` enunciated by Lord Morton in Canada Steamship Lines v R [1952] 1 All ER 305 at p 310 for the interpretation of exemption clauses in contracts. Citing the principles enunciated by Lord Greene MR in Alderslade v Hendon Laundry Ltd [1945] 1 All ER 244, Lord Morton proposed as follows:

(i) If the clause contains language which expressly exempts the person in whose favour it is made (hereafter called the proferens) from the consequence of the negligence of his own servants, effect must be given to that provision (ii) If there is no express reference to negligence, the court must consider whether the words used are wide enough, in their ordinary meaning, to cover negligence on the part of the servants of the proferens (iii) If the words used are wide enough for the above purpose, the court must then consider whether `the head of damage may be based on some ground other than that of negligence` The `other ground` must not be so fanciful or remote that the proferens cannot be supposed to have desired protection against it, but, subject to this qualification, the existence of a possible head of damage other than that of negligence is fatal to the proferens even if the words used are, prima facie, wide enough to cover negligence on the part of his servants.

The assumption of the law is that a party to a contract is not to be taken as having exempted himself from liability for his own negligence unless he uses express language to that effect. If he does not use express language, but uses language which is capable of being construed as having such an effect as well as having the effect of exempting him from some other species of liability, then the court will lean in favour of construing the language as having the latter effect. As explained by Lord Greene in the Alderslade case, the reason for this is that if a contracting party wishes in such a case to limit his liability in respect of negligence, he must do so in clear terms, and in the absence of such clear terms, the clause is to be construed as relating to a different kind of liability than that based on his negligence.

As has repeatedly been pointed out, the `tests` in the Canada Steamship case are merely guidelines for a restrictive interpretation of exemption and indemnity clauses. They do not form a rule of law. Furthermore, the court will not construe such a clause as capable of covering a head of liability other than the negligence of the proferens if it would be fanciful to do so. In Gillespie Bros & Co Ltd v Roy Bowles Transport Ltd [1973] QB 400 at p 415; [1973] All ER 193 at p 199, Lord Denning MR said that the correct position is simply this: even though the words of a clause are wide enough in their ordinary meaning to exclude liability for negligence, nevertheless if it is apparent that sufficient content can be given to them without doing so, then they will be given that content only; they will not be held to cover negligence.

The case at hand

In the instant case, cl 36.1(b) is part of a whole series of provisions in the tenancy agreement whereby the defendants seek generally to modify in the defendants` favour their rights and obligations as the landlords under the common law. These provisions may conveniently be put in three categories: exemption, insurance, and indemnity. Clause 36.1 is in the nature of an exemption clause. It provides as follows:

It is hereby agreed between the landlord and the tenant that the landlord and its officers, servants, employees or agents shall not be liable or in any way responsible:

(a) for any damage to property (whether belonging to the tenant or to others) entrusted to the landlord`s officers, servants, employees or agents in the shopping centre or Marina Square;

(b) for any injury or damage to persons or property or any consequential loss resulting from short circuit of electrical wiring, explosion, falling plaster, steam, gas, electricity, water sprinkler, rain plumbing or other pipe and sewerage system, leaks from any part of the shopping centre or Marina Square, the roof, street, sub-surface or any other place, dampness, or any appurtenances being out of repair unless caused by the wilful misconduct of the Landlord or its officers, servants, employees or agents;

(c) for any damage caused by other tenants or persons in the shopping centre or Marina Square or by buildings or other operations in the neighbourhood;

(d) to pay compensation to the tenant nor shall the rent abate for any delay in the supplying, for failure to furnish, or for any limitation, curtailment, rationing, restriction or interruption of service of any water, gas, electricity, telephone, cold air serving the premises, the shopping centre or Marina Square or for interruption of use of any equipment in connection with the supplying of any of the aforesaid services, caused by fire, accident, riot, strike, labour dispute, act of God, the making of any repairs or improvements, or causes beyond the control of the Landlord. The landlord shall use reasonable efforts diligently to remedy any interruption in the supply of such services.

(e) for any loss, damage or injury howsoever caused in the premises, the shopping centre or Marina Square;

(f) for any representations, promises or warranties with respect to the premises, its appurtenances, the shopping centre or Marina Square;

(g) to the tenant or others in respect of any act, omission or negligence of any porter, attendant or other servants or employees of the landlord in or about the performance or purported performance of any duty relating to the provision of the said services or obligations or any of them;

(h) for any diminution or obstruction of the light, air or view by any structure which may be erected on lands within or adjacent to Marina Square.

In addition, cl 36.2 and cl 36.3 provide as follows:

36.2 The landlord does not expressly or impliedly warrant that the premises at any time during the continuance of the term of this lease shall remain suitable or adequate for all or any of the purposes of the tenant and all warranties (if any) as to suitability and adequateness of the premises implied by law are hereby expressly negated.

36.3 Notwithstanding anything herein contained, the obligations of the tenant under this lease to pay rent and other sums due or to be due herein and to perform the tenant`s obligations herein, shall in no way be abated, affected, impaired or excused nor shall the landlord be in any way liable for damages to the tenant if the landlord is unable to fulfil any of its obligations under this lease, or to supply or is delayed in supplying any service covenanted for herein or is unable to make, or is delayed in making, any repair, addition, alteration or decoration which it is required to make herein where such delay or inability is caused by circumstances beyond the control of the...