Sunny Metal and Engineering Pte Ltd v Ng Khim Ming Eric

CourtHigh Court (Singapore)
Judgment Date15 December 2006
Docket NumberSuit No 396 of 2004
Date15 December 2006

[2006] SGHC 222

High Court

Andrew Phang Boon Leong J

Suit No 396 of 2004

Sunny Metal & Engineering Pte Ltd
Ng Khim Ming Eric (practising under the name and style of W P Architects)

Neo Kim Cheng Monica and Thiang Pei Yun Angela (TSMP Law Corporation) for the plaintiff

Lai Yew Fei (Rajah & Tann) for the defendant.

Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310 (refd)

Anns v Merton London Borough Council [1978] AC 728 (folld)

Caparo Industries plc v Dickman [1990] 2 AC 605 (refd)

CHS CPO GmbH v Vikas Goel [2005] 3 SLR (R) 202; [2005] 3 SLR 202 (folld)

Chua Kwee Chen v Koh Choon Chin [2006] 3 SLR (R) 469; [2006] 3 SLR 469 (refd)

Chwee Kin Keong v Pte Ltd [2004] 2 SLR (R) 594; [2004] 2 SLR 594,HC (refd)

Chwee Kin Keong v Pte Ltd [2005] 1 SLR (R) 502; [2005] 1 SLR 502,CA (refd)

Cooper v Hobart (2001) 206 DLR (4th) 193 (refd)

Customs and Excise Commissioners v Barclays Bank plc [2005] 1 WLR 2082, CA (not folld)

Customs and Excise Commissioners v Barclays Bank plc [2006] 3 WLR 1, HL (not folld)

D v Kong Sim Guan [2003] 3 SLR (R) 146; [2003] 3 SLR 146 (refd)

Development Bank of Singapore Ltd v Yeap Teik Leong [1988] 2 SLR (R) 201; [1988] SLR 796 (refd)

Donoghue v Stevenson [1932] AC 562 (refd)

Foakes v Beer (1884) 9 App Cas 605 (refd)

Forefront Medical Technology (Pte) Ltd v Modern-Pak Pte Ltd [2006] 1 SLR (R) 927; [2006] 1 SLR 927 (refd)

Forster v Outred [1982] 1 WLR 86 (refd)

Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 (folld)

Hong Leong Finance Ltd v Tay Keow Neo [1991] 2 SLR (R) 841; [1992] 1 SLR 205 (refd)

Ikumene Singapore Pte Ltd v Leong Chee Leng [1993] 2 SLR (R) 480; [1993] 3 SLR 24 (refd)

Jet Holding Ltd v Cooper Cameron (Singapore) Pte Ltd [2006] 3 SLR (R) 769; [2006] 3 SLR 769 (folld)

Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520 (refd)

Man B&W Diesel S E Asia Pte Ltd v PT Bumi International Tankers [2004] 2 SLR (R) 300; [2004] 2 SLR 300 (refd)

Mohd bin Sapri v Soil-Build (Pte) Ltd [1996] 2 SLR (R) 223; [1996] 2 SLR 505 (refd)

New Islington and Hackney Housing Association Limited v Pollard Thomas and Edwards Limited [2001] BLR 74 (refd)

Pang Koi Fa v Lim Djoe Phing [1993] 2 SLR (R) 366; [1993] 3 SLR 317 (refd)

People's Parkway Development Pte Ltd v Akitek Tenggara [1992] 2 SLR (R) 469; [1993] 1 SLR 704 (refd)

PT Bumi International Tankers v Man B&W Diesel S E Asia Pte Ltd [2003] 3 SLR (R) 239; [2003] 3 SLR 239 (refd)

RSP Architects Planners & Engineers v Ocean Front Pte Ltd [1995] 3 SLR (R) 653; [1996] 1 SLR 113 (refd)

RSP Architects Planners & Engineers v MCST Plan No 1075 [1999] 2 SLR (R) 134; [1999] 2 SLR 449 (refd)

Sea-Land Service Inc v Cheong Fook Chee Vincent [1994] 3 SLR (R) 250; [1994] 3 SLR 631 (refd)

Selectmove, Re [1995] 1 WLR 474 (refd)

Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206, CA (refd)

Shirlaw v Southern Foundries (1926) Ltd [1940] AC 701, HL (refd)

Standard Chartered Bank v Coopers & Lybrand [1993] 3 SLR (R) 29; [1993] 3 SLR 712 (refd)

Stilk v Myrick (1809) 2 Camp 317 (refd)

Stovin v Wise [1996] AC 923 (refd)

Sunrise Crane, The [2004] 4 SLR (R) 715; [2004] 4 SLR 715 (refd)

Sutcliffe v Chippendale & Edmonson (1971) 18 BLR 149 (refd)

Sutherland Shire Council v Heyman (1985) 157 CLR 424 (refd)

Tullio Planeta v Maoro Andrea G [1994] 2 SLR (R) 501; [1994] 2 SLR 489 (folld)

TV Media Pte Ltd v De Cruz Andrea Heidi [2004] 3 SLR (R) 543; [2004] 3 SLR 543 (refd)

Twinsectra Ltd v Yardley [2002] 2 AC 164 (refd)

Ultramares Corporation v Touche174 NE 441 (1931) (refd)

United Project Consultants Pte Ltd v Leong Kwok Onn [2005] 4 SLR (R) 214; [2005] 4 SLR 214 (refd)

University of Glasgow v Whitfield John Laing Construction Ltd (1988) 42 BLR 66 (refd)

Wagon Mound, The [1961] AC 388 (folld)

West Faulkner Associates v Newham London Borough Council (1992) 31 Con LR 105 (refd)

Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 (refd)

Wiltopps (Asia) Ltd v Emmanuel & Barker [1998] 2 SLR (R) 778; [1999] 1 SLR 354 (refd)

Wong Fook Heng v Amixco Asia Pte Ltd [1992] 1 SLR (R) 654; [1992] 2 SLR 342 (refd)

Yuen Kun Yeu v Attorney-General of Hong Kong [1988] AC 175 (refd)

Building Control Act (Cap 29,1999 Rev Ed)s 9 (4) (a)

Limitation Act (Cap 163,1996 Rev Ed)s 6 (1) (a) (consd)

Rules of Court (Cap 322,R 5, 2006 Rev Ed)O 22A

Limitation Act 1980 (c 58) (UK)s 8

Civil Procedure–Costs–Principles–Plaintiff awarded sum much less than that originally claimed due to set-offs–Whether such outcome may be characterised as failure on plaintiff's part to prove its claim–Whether plaintiff entitled to costs–Contract–Remedies–Remoteness of damage–Applicable rules and principles of remoteness where concurrent liability in contract and tort existing–Limitation of Actions–When time begins to run–Plaintiff suing defendant in tort and in contract–Whether circumstances such that time beginning to run from contractual date of completion–Section 6 (1) (a) Limitation Act (Cap 163, 1996 Rev Ed)–Tort–Negligence–Damages–Pure economic loss–Applicable test for liability in negligence for pure economic loss

The main contractor of a construction project failed to perform up to expectations pursuant to a design-and-build contract it had with the plaintiff, resulting in delays and defects in construction. As the main contractor went into liquidation, the plaintiff brought an action against the defendant, the architect employed by the main contractor, based on a deed of indemnity (“the Deed”) entered into by the plaintiff and defendant, and also on the tort of negligence for pure economic loss. The plaintiff argued that the Deed established the requisite legal nexus between itself and the defendant.

As grounds for its action against the defendant, the plaintiff alleged a breach of cll 1 and 4 of the Deed. Clause 1 of the Deed stated that “the [defendants] warrant that they shall exercise reasonable skill, care and diligence in the performance of their duties to the Contractor and/or the [plaintiff]”. Clause 4 of the Deed stated that “the [defendants] shall indemnify and keep indemnified the [plaintiff] from and against all claims, demands, proceedings, damages, costs, charges and expenses arising out of or in connection with any breach of duty, whether in contract, in tort or otherwise”.

Held, allowing the claim in part:

(1) The court ought to give effect to the terms of the contract between the parties and to interpret such terms in the light of the surrounding circumstances as a whole. The plaintiff clearly intended the Deed to give it extra legal protection by subjecting the defendant, on a personal level, to legal duties that the defendant would not otherwise have had under the then existing build-and-design contract, under which the defendant owed no legal duties to the plaintiff. There was no other logical reason for the plaintiff insisting on the defendant signing the Deed in general and agreeing to cl 1 therein in particular: at [32].

(2) Clause 1 of the Deed could not be worded more clearly. The defendant owed the plaintiff a contractual duty of care under cl 1 of the Deed to assist in ensuring that the main contractor fulfilled its obligations under the design-and-build contract. Clause 4 of the Deed, however, did not give rise to a similar duty of care as it was an indemnity clause that necessarily presupposed liability incurred by the plaintiff toa third party. Clauses 1 and 4 of the Deed were separate and independent of each other, and dealt with different legal obligations. There had been a breach of cl 1 of the Deed on the facts of the present case: at [32] to [35].

(3) In so far as liability in negligence for pure economic loss was concerned, the applicable test was the “two-stage process” which, in substance and effect, was the same as the “two-stage test” laid down by Lord Wilberforce in Anns v Merton London Borough Council [1978] AC 728: at [87].

(4) The “two-stage test”, in turn, was the same as the “three-part test” in substance and effect. In fact, by confining the duty of care to its strictly legal form by incorporating only the two most essential elements, ie legal proximity qualified by policy, the “two-stage test” was superior to the “three-part test” which tended to complicate matters unnecessarily by introducing the first element of a factual conception of reasonable foreseeability. This factual requirement was redundant because it was almost always satisfied: at [52]to [55].

(5) The complementary concepts of “voluntary assumption of responsibility” and “reasonable reliance” aided the court's application of the test of proximity. The assumption of responsibility by the plaintiff was not only voluntary; it was contractual by virtue of the Deed. Given the fact that a defendant would not be allowed to be better off in tort than it would have been in contract where concurrent liability existed, then depending on the precise contractual terms, it was more likely than not that legal proximity was established when there was a contractual relationship between the parties concerned: at [63], [109] and [120].

(6) There was established, on the facts, both a duty of care as well as a breach of that duty: at [122] and [125].

(7) In the absence of direct authority as to when time may be said to have begun to run in the circumstances, the focus ought to be on the nature and scope of the duty agreed to be undertaken by the defendant, rather than merely on the form of the building agreement or arrangement between the relevant parties. The defendant owed the plaintiff a continuing duty to exercise reasonable care in the supervision of the project work carried out by the main contractor and the defendant's argument to the effect that time began to run from the date of contractual completion had to be rejected. The defendant's legal duty extended beyond the contractual...

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  • MWB Business Exchange Centres Ltd: The Practical Benefit Doctrine Marches On
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    • The Modern Law Review Nbr. 80-2, March 2017
    • 1 March 2017
    ...n 6 above, 11 per Glidewell LJ, 19 per Russell LJ and 23 per Purchas LJ.27 See Sunny Metal & Engineering Pte Ltd vNg Khim Ming Eric [2007] 1 SLR 853 (Singapore Courtof Appeal) at [30]; B. Coote, ‘Consideration and Benefit in Fact and in Law’ (1990-91) 3 JCL21, 25-26; P. Lee, ‘Contract Modific......

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