The Teneriffe Development Pte Ltd v Alain Mahendran Arul and Another

• Jurisdiction: Singapore
• Judge: Thian Yee Sze
• Judgment Date: 30 March 2009
• Neutral Citation: [2009] SGDC 107
• Court: District Court (Singapore)
• Year: 2009
• Published date: 14 May 2009
• Plaintiff Counsel: Adrian Wong and Dominic Chan (Rajah & Tann)
• Defendant Counsel: K Sureshan and Raymond Wong (Wong Thomas & Leong)
• Citation: [2009] SGDC 107

30 March 2009

District Judge Thian Yee Sze:

1 This was a typical dispute between the developers and purchasers over the withholding by the latter of part of the last 13% of the purchase price because of alleged defects in the property. By a sale and purchase agreement (“the sale agreement”) dated 1 August 2002 between the plaintiff developers and the defendant purchasers, the defendants purchased a unit from the plaintiffs in a cluster housing project called “The Teneriffe” at a price of $1.288 million[note: 1].

2 It was not in dispute that pursuant to Clause 5.4 of the sale agreement, the defendants were to pay the last installment of the purchase price, which amounted to $167,440, to the plaintiffs by 25 March 2004. $62,400 of the sum owing was paid on or about 17 June 2004, leaving an unpaid balance of $105,040. The only dispute was whether the defendants were entitled to deduct any of that unpaid sum by way of a set-off pursuant to Clause 17.3 of the sale agreement to take into account the damages they had incurred arising from the alleged defects.

3 Parties brought up a number of what were essentially factual disputes. If one were to drill down these disputes to their core, there were two key issues which the court had to decide to answer the question of the amount the defendants were entitled to deduct from the outstanding purchase price. They were, first, the scope of defects which had not been rectified by the plaintiffs, and second, the cost, if any, for the rectification of those defects by a third party contractor. These two issues were considered in turn.

4 At this juncture, I should state that I found both the expert witnesses called by the respective parties to be professional and forthright. The real divergence lay in the opinions they rendered and the basis or premise for those opinions. On this aspect, I was largely in agreement with the plaintiffs’ analysis on the weight to be accorded to each of the expert witness’s evidence, to which I would return later in this judgment.

Scope of defects not rectified by the plaintiffs

5 It is for the party who asserts a fact to prove it. Hence, the first thing the defendants had to satisfy the court in respect of their counterclaim for damages for defects was as to the extent of defects which had been left unrepaired. For those which had been repaired by the plaintiffs or their contractors, the defendants evidently had not suffered any measure of loss unless they could show that in the intervening period before the defects had been rectified, some other loss (eg in the form of damage to the property) was incurred. This was neither the case here nor was it argued by the defendants that such was the case – their case was simply that none of the defects had been rectified. In any event, I found that they had not adduced any evidence to show that they had suffered any other loss (see [29] – [30] below).

6 Parties submitted a joint Scott Schedule[note: 2], which set out the three items of alleged defects. All three items pertained to water seepage – item (i) was in respect of water seepage from the roof terrace and planter box. Item (ii) was in respect of water seepage through the curtain wall and item (iii) was in respect of water ingress through the louvered window. The plaintiffs’ expert, Chin Cheong (“Chin”), inspected the unit on 23 March 2004, carried out a water ponding test over two days on 12 and 13 April 2004 and put up a surveyor’s report dated 11 May 2004[note: 3]. At the time of his report in May 2004, Chin identified the three items listed in the Scott Schedule as defects. There was no evidence that he visited the unit any time thereafter. The defendants’ expert, John McGowan (“McGowan”) agreed with that analysis. The crux of the issue was whether these three items were later rectified by the plaintiffs or their contractors. The plaintiffs said that they were, whereas the defendants claimed exactly the opposite.

7 On the evidence before me, it was clear that the defect in item (ii) of the Scott Schedule had not been rectified. This was admitted to by the plaintiffs’ witness, Teo Swee Hoe, an assistant project manager with the plaintiffs, at the trial during cross-examination:

Q: As far as you know, can you pick up the Scott Schedule at the stand? Take a quick look at the defects. Can you tell us what are the defects that have not been rectified in this list?

A: In the Scott Schedule, only outstanding defect is Item (ii).

(Notes of Evidence (“NE”) at NE-22C to D)

…

Q: Can you confirm how may spray tests were conducted at the Dfs’ property and how many spray tests failed?

A: I can’t recall how many spray tests. There were a number of spray tests we conducted for different areas. The only outstanding we have is the curtain wall leakage. On that sole outstanding item that is the curtain wall, we took about three or four times of spray tests.

(at NE-32C to D)

8 As for items (i) and (iii) of the Scott Schedule, the defendants did not show through their expert witness, McGowan, that these had not been rectified. McGowan’s first expert report (dated 14 September 2004)[note: 4] was based on site inspections conducted on 13 and 22 May 2004. The content in the second clarification report in September 2005 dealt with details of the estimated costs of repair, including the impact on the cost of repairs should the existing warranty provided by the plaintiffs’ contractors, Kimly Construction Pte Ltd, “no longer have effect”[note: 5], and which did not appear to be premised upon further site inspections. In respect of the rectification works carried out by the plaintiffs’ contractors, the report also noted as follows:

Babtie Asia were informed by both the owner and the tennant (sic) of the Property that a number of attempts had been made to rectify the water ingress problem. Babtie Asia noted during the inspections that repairs appear to have been carried out in a haphazard manner and that the repair workmanship was poor. Perfect examples of this were noted on the roof level … It appears that the attempted repair was carried out in this manner because to have repaired properly would have been an (sic) messy, disruptive and time consuming process. These examples of poor workmanship are typical of the touch up/quick fix solutions that appear to have been carried out without consideration of the long term consequences of the work.

(at PBD-229)

9 The dates of the “inspections” on which Babtie Asia noticed the state of repairs were not given. Neither did McGowan delve into the specifics of the unsatisfactory nature of the repair. There were also no photographs exhibited to buttress his assertions.

10 The last one-page report put up by McGowan dated 2 May 2007[note: 6] was based on a site visit on 2 March 2007. As stated in the report, the purpose of the site inspection was to “view the effect of interim repair works initiated by the owner and carried out to the 1^st storey terrace in July 2006”.

11 The last report did not go into much analysis about the expert’s own opinion on the status or cause of the water seepage save as to assert at paragraph 2.0.1 of the report that “To date nothing has been done to fully rectify these defects. In fact during this period the owner has been forced to undertake interim repairs to minimize the effect of the water ingress”. According to report, although water marks were noted in the basement study, “(t)he source of this water ingress cannot be ascertained without detailed testing”. It was also observed by McGowan that “there is still noticeable water ingress through the curtain wall into the basement from other sources”. This observation related to item (ii) of the Scott Schedule, which I had determined, upon the plaintiffs’ own admission, had not yet rectified. No further details on the state of the areas with alleged water seepage were provided by McGowan in the last report save for what was reported by the owners.

12 In the absence of objective and cogent evidence adduced by the defendants save for the 2^nd defendant’s own assertions that none of the defects had been repaired to her satisfaction, I found that the defendants had failed to satisfy the burden of proving that items (i) and (iii) of the Scott Schedule had not been repaired.

Cost of rectifying item (ii) by a third party contractors

13 Having decided that the only outstanding defect to be repaired was item (ii) of the Scott Schedule, ie “curtain wall water ingress”, I next considered what was arguably the most contentious issue between parties - the cost of repairs. With respect, much of the evidence provided more of a background to the dispute between parties rather than evidence on what the quantum of the cost of repairs should be. Questions like the number of times the plaintiffs’ contractors went to the defendants’ unit to undertake allegedly botched-up attempts at repair were irrelevant.

14 Much ado was also made over a “compromise” proposal between the parties in April 2004, pursuant to which the defendants would “allow an amount of S$20,000 or the cost of rectification works, whichever is higher, to be withheld upon the release of Chin Cheong’s report”[note: 7], with the remaining outstanding balance to e paid within 14 days after the defendants formally accepted Chin’s report (which was the same report dated 11 May 2004. The 2^nd defendant accepted that their expert, McGowan, essentially agreed with Chin’s findings, including the mode of rectification works[note: 8]. However, according to the 2^nd defendant, they did not follow through with what was set out in the “compromise” proposal as “there was a complete loss of confidence in the ability of the contractor to complete the rectification work”[note: 9]. In any case, the state of mind of both parties in relation to the “compromise” proposal and whether there was any breach of this proposal by either party was not necessary for me to decide and irrelevant to arriving at my decision as...