PEX International Pte Ltd v Lim Seng Chye

• Jurisdiction: Singapore
• Judge: Steven Chong JA,Andrew Phang Boon Leong JA,Sundaresh Menon CJ
• Judgment Date: 19 December 2019
• Date: 19 December 2019
• Docket Number: Civil Appeals Nos 181 and 183 of 2018
• Court: Court of Appeal (Singapore)

PEX International Pte Ltd

and

Lim Seng Chye and another and another appeal

[2019] SGCA 82

Sundaresh Menon CJ, Andrew Phang Boon Leong JA and Steven Chong JA

Civil Appeals Nos 181 and 183 of 2018

Court of Appeal

Tort — Nuisance — Private nuisance — Role of foreseeability in nuisance — Property owner authorising independent contractor to conduct construction works involving hot works on property — Independent contractor's negligence resulting in fire damage to adjoining property — Property owner not aware of hot works being undertaken on day of fire — Whether foreseeability of risk of harm relevant to establishing liability for private nuisance — Whether property owner liable in private nuisance for fire caused by contractor

Tort — Rule in Rylands v Fletcher — Role of foreseeability under rule in Rylands v Fletcher — Property owner authorising independent contractor to conduct construction works involving hot works on property — Independent contractor's negligence resulting in fire damage to adjoining property — Property owner not aware of hot works being undertaken on day of fire — Whether foreseeability of risk of harm relevant to establishing liability for rule in Rylands v Fletcher — Whether property owner liable under rule in Rylands v Fletcher

Held, dismissing the appeal and cross-appeal:

(1) Foreseeability of the risk of harm was not generally relevant in establishing liability in the tort of private nuisance, with the relevant control mechanism being the principle that the use of land had to be reasonable. Foreseeability of the type of harm, however, was relevant in determining whether a type of loss was too remote to be claimed: at [53] and [55] to [58].

(2) There was an unreasonable use of land because the hot works were done at the perimeter between No 15 and No 17 in the presence of strong winds, in close proximity to the flammable mattresses stored at the backyard of No 15 and significantly, without any proper supervision of the workers. Lim's claim was not too remote because the type of harm (damage due to fire) was reasonably foreseeable by PEX since PEX authorised Formcraft to conduct the A&A works which ordinarily would involve hot works. Thus, the Judge was right to hold PEX liable for private nuisance: at [61] to [64].

(3) The authorities uniformly established that foreseeability of the risk of harm was not relevant to determining liability under the rule in Rylands v Fletcher: at [69]

(4) There was a non-natural use of land and there was an escape of a dangerous object onto Lim's property. The loss was not too remote as the type of harm was foreseeable. Thus, PEX's appeal on the rule in Rylands v Fletcher was dismissed: at [70].

[Observation: In England, the continued existence of the rule in Rylands v Fletcher was justified on the basis that it was an exception to the general rule that foreseeability of the risk of harm was relevant in establishing liability for nuisance. The effect of the present decision appeared to undermine this distinction. As such, it was an open question whether it remained necessary to preserve the distinction between nuisance and the rule in Rylands v Fletcher. There were, however, other reasons given to justify the continued existence of the rule: at [67] to [69].]

Case(s) referred to

Cambridge Water Co v Eastern Counties Leather Plc [1994] 2 AC 264 (refd)

Fletcher v Rylands (1866) LR 1 Ex 265 (refd)

M'Alister (or Donoghue) v Stevenson [1932] AC 562 (refd)

Northumbrian Water Ltd v Sir Robert McAlpine Ltd [2014] EWCA Civ 685 (refd)

OTF Aquarium Farm v Lian Shing Construction Co Pte Ltd [2007] SGHC 122 (refd)

Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty [1967] 1 AC 617 (refd)

Rylands v Fletcher (1868) LR 3 HL 330 (refd)

Sedleigh-Denfield v O'Callaghan [1940] AC 880 (refd)

Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency [2007] 4 SLR(R) 100; [2007] 4 SLR 100 (refd)

Spicer v Smee [1946] 1 All ER 489 (refd)

Tesa Tape Asia Pacific Pte Ltd v Wing Seng Logistics Pte Ltd [2006] 3 SLR(R) 116; [2006] 3 SLR 116 (refd)

Transco plc v Stockport Metropolitan Borough Council [2004] 2 AC 1 (refd)

Xpress Print Pte Ltd v Monocrafts Pte Ltd [2000] 2 SLR(R) 614; [2000] 3 SLR 545 (folld)

Facts

The present appeals involved a dispute in relation to a fire that caused extensive damage to a building owned by Lim Seng Chye (“Lim”), located at 15 Link Road (“No 15”). The fire occurred while construction involving hot works was being carried out in an adjoining property located at 17 Link Road (“No 17”). PEX International Pte Ltd (“PEX”) was the owner and occupier of No 17. PEX engaged Formcraft Pte Ltd (“Formcraft”) as the contractor to carry out the construction works.

PEX engaged Formcraft for three construction projects between 2012 and 2013. PEX engaged Formcraft on the strength of the recommendation of one Poh Hui Choo (“Poh”). Poh was a mutual friend of Molly Chan Ai Teow (“Chan”), the general manager of PEX, and Ross Tan Joo Kim (“Tan”), the chief executive officer of PEX. In addition to Poh's recommendation, Chan and Tan also inspected Formcraft's work on Poh's premises and were impressed by the quality of the renovation work. The work they wanted to do on No 17 was similar to the renovation work done on Poh's premises.

The first and second projects were completed to PEX's satisfaction. The third project (“the A&A works”) required hot works such as welding and PEX was aware of this fact. The A&A works also required certain government approvals. PEX engaged ETS Design & Associates (“ETS”) to assist in obtaining all the necessary permits and approvals for the A&A works.

Formcraft commenced the A&A works in late March 2013. This was done without obtaining the requisite permits and in defiance of the express instructions of ETS not to commence work. Formcraft was authorised by PEX to conduct the A&A works but there was no evidence that PEX knew that hot works were being conducted on the day of the fire.

On that day, sparks from the hot works at No 17 fell onto flammable mattresses and other miscellaneous items at the backyard of No 15 and resulted in the fire. Strong winds were present at the time, which fanned the fire and caused the fire to spread. It was not in dispute that Formcraft was negligent in failing to ensure adequate supervision and if a supervisor had been present during the welding works, he would have noted the presence of strong winds and the close proximity to flammable material and would have put a stop to the welding.

Lim commenced a suit against PEX and Formcraft. Formcraft failed to enter an appearance in the proceedings. The trial below proceeded on the issues of liability alone. Lim's claim against PEX was founded on the tort of negligence, the tort of private nuisance and the rule in John Rylands and Jehu Horrocks v Thomas Fletcher(1868) LR 3 HL 330 (“Rylands v Fletcher”).

In the court below, the High Court judge (“the Judge”) found that PEX was not liable in negligence because PEX delegated the performance of the A&A works to Formcraft as an independent contractor and PEX was not negligent in the selection of Formcraft. However, the Judge found that PEX was liable in the tort of private nuisance. She highlighted that in order to establish nuisance liability, there was a requirement of foreseeability of harm and unreasonable use of land. PEX could have reasonably foreseen that the work it had instructed Formcraft to do was likely to result in a nuisance to Lim and there was unreasonable use of land, in part because the hot works were executed in a manner that was foreseeably unsafe. The Judge also found PEX liable in relation to the rule in Rylands v Fletcher. Foreseeability of damage of the relevant type was a prerequisite of liability in damages under the rule and PEX ought to have known that the A&A works it had commissioned included hot works. The hot works, which produced sparks or molten globules, amounted to a non-natural use of land. These sparks constituted a dangerous “thing” which posed an exceptionally high risk to neighbouring property should the sparks escaped. The sparks escaped and caused extensive damage.

PEX appealed the Judge's findings on the tort of private nuisance and the rule in Rylands v Fletcher. Lim appealed the Judge's findings on negligence.

Chia Boon Teck, Darryl Chew ZijieandChan Xian Yi, Jonathan (Chia Wong Chambers LLC) for the appellant in CA 181/2018 and the respondent in CA 183/2018;

Appoo Ramesh and Vinodhan Gunasekaran (Just Law LLC) for the first respondentin CA 181/2018 and the appellant in CA 183/2018;

Second respondent in CA 181/2018 absent and unrepresented.

19 December 2019

Steven Chong JA (delivering the grounds of decision of the court):

Introduction

1 Foreseeability is a legal term of art that arises in different contexts. It is relevant for the purposes of examining the existence of a duty of care for the tort of negligence. It is also relevant in the context of remoteness of damage to determine the types of losses that are recoverable for the tort of private nuisance. The former inquiry bears on whether liability is established while the latter governs whether liability will be limited to certain types of damage.

2 In cases where damage to a neighbour's land is caused by an activity “which gives rise to the risk of escape of physically dangerous or hazardous material”, it is quite common for such claims to be brought in negligence as well as in nuisance. Although these two torts are quite distinct and different in their nature, the element of foreseeability would typically feature in the analysis of both claims albeit for different purposes. Foreseeability of the type of harm (which is relevant for the purposes of remoteness of damage in respect of claims in nuisance) is quite different from foreseeability of the risk of harm (which is relevant to...