Sie Choon Poh (trading as Image Galaxy) v Amara Hotel Properties Pte Ltd (No 2)

• Judge: Lai Kew Chai J
• Judgment Date: 15 July 2005
• Neutral Citation: [2005] SGHC 127
• Citation: [2005] SGHC 127
• Defendant Counsel: Adeline Chong (Harry Elias Partnership)
• Published date: 22 July 2005
• Plaintiff Counsel: Navinder Singh (Navin and Co)
• Date: 15 July 2005
• Docket Number: Suit No 914 of 2002
• Court: High Court (Singapore)
• Subject Matter: Whether landlord entitled to rely on exclusion clause,Landlord relying on exclusion clause for damage caused in absence of landlord's gross negligence,Whether landlord's conduct amounting to gross negligence,Tenant claiming damages from landlord for breach of covenant to maintain and keep in repair common areas,Landlord and Tenant,Repair,Covenants

15 July 2005 Judgment reserved.

Lai Kew Chai J:

1 At an earlier trial, I allowed the plaintiff tenant’s claim for damages arising out of the landlord’s breach of the covenant to repair: see [2003] 3 SLR 703. The Court of Appeal allowed the landlord’s appeal, ruling that the issue of whether the defendant was negligent or not was joined, and remitted the matter back to me for consideration of the issue whether on the facts, cl 8.1 of the lease applied so as to exempt the landlord from liability for the tenant’s losses.

2 The material facts are as follows. The defendant, Amara Hotel Properties Pte Ltd (“Amara”), was the owner of the shopping complex known as “The Amara” in Tanjong Pagar, including a food court as well as several shop units. The plaintiff, Sie Choon Poh (trading as Image Galaxy) (“Mr Sie”) took a lease of a shop unit below the food court for a period of three years ending on 8 September 2001 under a lease agreement dated 28 July 1998. Mr Sie operated a printing business at the unit.

3 The material terms of the lease for present purposes are as follows:

8.1 Negligence

The Lessees agree to occupy use and keep the demised premises at the risk of the Lessees and hereby release the Lessors and their contractors and invitees in the absence of any gross negligence on the part of the Lessors their servants or agents from all claims and demands of every kind in respect of or resulting from any accident damage or injury occurring in the Complex or the demised premises and the Lessees expressly agree that in the absence of any such negligence as aforesaid the Lessors shall have no responsibility or liability for any loss damage or injury suffered by the Lessees (whether to or in respect of the Lessees’ person property or business conducted by the Lessees) as a result of any breakage leakage accident or event in the Complex or the demised premises.

9.2 Quiet Enjoyment

To permit the Lessees … to have quiet enjoyment and exclusive possession of the demised premises during the said term without any interruption by the Lessors …

9.4 Maintenance of the Complex

The Lessors shall maintain and keep in repair the Common Area during the term of this Lease inclusive of the exterior walls (other than shop fronts) and all parking spaces roads pavements water drainage lighting and other common facilities and services Provided Always that the manner in which such areas and facilities shall be maintained and the expenditure thereon shall be at the absolute discretion of the Lessors.

[emphasis added]

4 On 19 April 2001, the T-joint of a pipe system carrying caustic effluents from the food court above Mr Sie’s unit ruptured and caused widespread damage to the machinery of Mr Sie. The T-joint, concealed within the ceiling in the unit, was found to be in a severe state of corrosion, which led to the rupture.

5 The issue for determination at this remitted trial is whether, as Mr Sie asserts, Amara was “grossly negligent” and therefore disentitled from relying on the exemption under cl 8.1 of the lease.

Gross negligence

The law

6 The term “gross negligence” as a concept is not susceptible of definition. Nor is it possible to lay down a standard, derived logically from past cases, by which a court can confidently rule when negligence should be deemed to be gross negligence. This is because the circumstances giving rise to the duty to act, including the duty to remove a potentially damaging or dangerous situation, vary from case to case and they also vary in infinite degree. It should be recognised that it is a practical impossibility that all the relevant circumstances which point to the degree of the negligence involved should be the same in any two cases that may arise.

7 But the meaning of the term within a contractual term is a matter of construction and my task is to find the intended meaning. In doing so, I shall consider the text in the context. The aim and purpose of the provision should be seen in the light of its factual matrix. In a shopping and hotel complex such as the Amara, where there are many shops and a food court, it is understandable for the defendant to exclude liability for any damage caused by negligence, however slight the dereliction of the duty of care. But what is not so easily acceptable is the exclusion of the consequences of serious errors.

8 How is a court to find as a matter of fact that there is gross negligence? Obviously, the particular circumstances at play in each case have to be examined and evaluated. Cases have shown that factors, such as notice or awareness of the existence of the risk, the extent of the risk, the character of the neglect, the duration of the neglect and, not least, the ease or difficulty of fulfilling the duty (eg, checking the condition of the pipes in the instant case) are important, and in some cases vital, in determining whether the fault (if any) of a defendant is ‘so much more than merely ordinary neglect that it should be held to be very great, or gross negligence’: see Belanger v Michipicoten (Township) 31 MPLR (2d) 198 and Holland v Toronto (City) [1927] 1 DLR 99 discussed therein.

9 I am told by counsel that there is no local case which dilates on what would constitute gross negligence in an exemption clause in contract or generally in the law of tort. I therefore turn to cases in other jurisdictions for guidance. In The Hellespont Ardent [1997] 2 Lloyd’s Rep 547, the plaintiffs, who had purchased tankers and incurred heavy losses on repairs and on their operations, sued each of the five defendants on the ground that they were grossly negligent and/or guilty of wilful misconduct in failing to arrange for adequate inspection of Ardent class records and/or adequate survey of her condition. The defendants relied on an exemption clause similar to cl 8.1 in the instant case. Mance J held that the inspection of full class records was an elementary step that any...