RSP Architects Planners & Engineers v Ocean Front Pte Ltd and another appeal

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeGoh Joon Seng J
Judgment Date01 November 1995
Neutral Citation[1995] SGCA 79
Citation[1995] SGCA 79
Defendant CounselJimmy Yim and Lau Kok Keng (Drew & Napier),JG Advani and Chee Wei-Lin (PK Wong & Advani)
Plaintiff CounselMohan R Pillay and Lawrence Tan (Wong Partnership)
Docket NumberCivil Appeals Nos 185 and 188 of 1994
Published date19 September 2003
Date01 November 1995
Subject MatterCommon property,Management corporation,Whether clauses in sale and purchase agreement between developer and subsidiary proprietors could benefit management corporation,Relationship between management corporation and developers,Passing of benefits,Proximity,Capacity to sue and be sued,Whether management corporation could sue developers on behalf of subsidiary proprietors,s 57(2) Conveyancing and Law of Property Act (Cap 61, 1994 Ed),Whether giving rise to sufficient degree of proximity,s 33(2) Land Titles (Strata) Act (Cap 158, 1988 Ed),Strata titles,Pure economic loss,Tort,Land,Existence and scope of duty of care,Representative actions,Negligence,s 116 Land Titles (Strata) Act (Cap 158, 1988 Ed),Action for defects in common property

Cur Adv Vult

(delivering the judgment of the court): The facts

These two appeals arose from a determination by the High Court of preliminary issues of law pursuant to O 33 r 2 of the Rules of the Supreme Court 1990. The relevant facts that led to the determination and subsequently the appeals are briefly these. The Management Corp Strata Title Plan No 1272 (the management corporation) is the management corporation of a condominium known as `Bayshore Park Condominium` situate at Bayshore Park Road which was developed and built by Ocean Front Pte Ltd (the developers); RSP Architects Planners & Engineers (the architects) were the architects involved in the development of the condominium. The management corporation was constituted in November 1987 or thereabouts, and as from 15 November 1987 it took over the management and administration of the condominium. In May 1989 complaints were made by it to the developers about the spalling of concrete in the ceilings of the car parks of the various blocks, namely, Aquamarine, Jade, Pearl, Diamond, Emerald and Sapphire Towers. Arising from the complaints, repairs were attempted by the developers in 1989, but these did not resolve the problem. Consultants were appointed by the management corporation in 1990 to investigate the spalling of the concrete. The consultants reported, inter alia, that though repairs had been attempted, the spalling had recurred, and new areas were affected. The consultants were of the opinion that the spalling was caused by insufficient concrete protection of the steel rebars. Subsequently, a second opinion was sought from another firm of consultants, and the same conclusion was reached. There was also insufficient drainage of some common areas which was alleged to have been caused by the lack of a sufficient gradient, leading to the collection of water in areas surrounding several lift lobbies in the buildings.

On 28 June 1991 the management corporation took out a writ against the developers claiming damages on the basis of alleged faulty construction of certain areas of the common property. It was alleged that faulty construction of the ceiling of certain basement car parks had resulted in the spalling of concrete and that the faulty construction of certain common areas and corridors around the lift lobbies had resulted in water ponding in those areas, and that the developers had committed a breach of duty in failing to take reasonable care in the construction of these common areas. The developers after filing their defence took out third party notices against Ssangyong Engineering & Construction Co Ltd as the building contractor, the architects and Lau Downie & Partners as the engineers and they were joined in the action as third parties.

Subsequently, at the hearing of the summons for direction, the developers applied for a determination of certain preliminary issues, which were phrased as follows:

(i) whether the developers owe a duty to the [management corporation] in its own capacity in law and/or in contract based on paras 11 and 21 of the statement of claim and the [management corporation`s] further and better particulars filed on 17 March 1993.

(ii) whether the subsidiary proprietors in whose capacity the [management corporation] is claiming in the alternative under paras 13 and 23 of the statement of claim are `jointly entitled to take proceedings` with respect to the alleged losses arising from the alleged breach of the sale and purchase agreements within the meaning of s 116(1) of the Land Titles (Strata) Act as alleged; and

(iii) whether by virtue of the general meetings of 31 March 1991 and 29 March 1992, the subsidiary proprietors may be deemed to have so authorized and/or consented to and/or ratified the [management corporation`s] action to sue the developers for the alleged breach of the said sale and purchase agreements.



The preliminary issues came before Warren LH Khoo J. At the commencement of the hearing the third parties, including the architects, appeared. The management corporation objected to their participation, but the learned judge held that the third parties could be heard if they undertook to be bound by the decision. That undertaking was given on their behalf by their counsel, and full arguments from all the parties were heard. The learned judge characterized the issues as follows:

(i) whether it is competent for the management corporation to sue in its own name for the alleged defects in the construction of those parts of the common property; and

(ii) whether the management corporation is barred from claiming pure economic loss in the form of the cost of repair of the said defects.



In a reserved judgment (reported in [1995] 1 SLR 751 ) the learned judge held that the management corporation was competent to institute and maintain the action against the developers and was entitled to recover the cost of putting right the alleged defects in the common property. Against his decision both the developers and the architects have now appealed.

The appeal

At the commencement of the hearing before us, a procedural point was again raised as to the architects` locus standi. Counsel for the management corporation objected to the involvement of the architects in these appeals. We disallowed the objection, which, in our opinion, has absolutely no basis. The architects had participated at the hearing before the learned judge and agreed to be bound by his decision. They have an undoubted right to appeal against his decision. In any event, the architects are, strictly speaking, involved in a separate appeal as against the developers in which the management corporation is not a party, and are clearly entitled to be heard in their appeal. As a matter of convenience we heard both the appeals together, as both are appeals against the same decision and on substantially the same grounds.

We now turn to the substantive issues before us, which basically were the same before the learned judge, namely:

(i) whether the management corporation is competent to institute and maintain the action against the developers claiming damages in negligence in the construction of the various parts of the common property; and

(ii) whether the management corporation has a claim against the developers, whether in contract or in tort, for pure economic loss in the form of cost of repair or making good those defects complained of.



Section 33

The first issue involves the legal capacity of the management corporation to bring the action and really turns on the construction of s 33 of the Land Titles (Strata) Act (Cap 158, 1988 Ed) (the Strata Act). Section 33 reads as follows:

(1) The subsidiary proprietors from time to time of the lots in a subdivided building, comprised in a strata title plan shall, by virtue of this Act, upon registration of the strata title plan -

(a) constitute a body corporate capable of suing and being sued and having perpetual succession and a common seal; and

(b) ...

(2) The management corporation may -

(a) sue and be sued on any contract made by it;

(b) sue and be sued in respect of any matter affecting the common property;

(c) sue in respect of any loss or damage suffered by a management corporation arising out of a contract or otherwise; and

(d) be sued in respect of any matter connected with the parcel for which the subsidiary proprietors are jointly liable.



It was argued on behalf of the management corporation that s 33(2) specified the causes of action, and reliance was placed in particular on para (c) which states that a management corporation `may sue in respect of any loss or damage suffered by a management corporation arising out of a contract or otherwise`. The developers and the architects on the other hand maintained that the entire s 33(2) does no more than clarify the capacity of the management corporation. Both sides referred to the legislative history of s 33 to support their respective arguments. It is therefore necessary to delve briefly into the legislative history of this section.

The Strata Act was first enacted in 1967 and ss 18(1) and (2) of the 1967 Act provided as follows:

(1) The subsidiary proprietor or subsidiary proprietors shall, by virtue of this Act, upon registration of the strata title plan be a body corporate with perpetual succession and a common seal and shall be called `the management corporation`.

(2) The management corporation may -

(a) sue and be sued on any contract made by it;

(b) sue and be sued in respect of any matter affecting the common property;

(c) be sued in respect of any matter connected with the parcel for which the subsidiary proprietors are jointly liable.



The Act subsequently underwent series of amendments, and the Act which amended s 18 was the Land Titles (Strata) Amendment Act of 1987. The Bill for this Act was introduced in Parliament as Bill No 10 of 1986 and was referred to a Select Committee. The Bill proposed a renumbered s 28 which was to replace the old s 18 of the 1967 Act. Principally, the proposed s 28 sought to introduce two changes to the old s 18. First, it introduced a new para 1(a) which read `constitute a body corporate capable of suing and being sued ...`, and second, it sought to repeal s 18(2)(a). No legislative material was available to explain the draftsmen`s intention for the proposed changes set out in the Bill. The Select Committee received various representations and also heard oral evidence. In particular, there was a paper submitted by Mr Suresh Gupta, an advocate and solicitor, in which he suggested, inter alia, that the management corporation should be given the power to sue a developer of the building for any defects in the common property caused by bad workmanship or negligence in the construction of the building or in using substandard materials for the purpose. Mr Gupta also appeared before the Committee and there was an exchange of views between him and Mr Barker, the Minister...

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