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District Court of Singapore |
] [Hide Context] |
Goodwill Building Resources Pte Ltd v Yue Cheong Kuan t/a Ben Design Architects and Another
[2006] SGDC 240 |
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DC Suit 2831/2006, DA 30/2006, 31/2006 |
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31 Oct 2006 |
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District Court |
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Tan May Tee |
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Andrew J Hanam (Clifford Law Corporation) for the plaintiffs, Michael Por & Sheikh Mohamed Eusoff (Tan Lee & Partners) for the defendants |
Judgment
31 October 2006
District Judge Tan May Tee:
Introduction
1 This case concerned the recovery of pure economic loss in tort. Since our Court of Appeal’s landmark decision
in
RSP Architects Planners & Engineers v Ocean Front Pte Ltd
The parties
2 Goodwill Building Resources Pte Ltd, the Plaintiffs in this action, were appointed the contractor for the construction
of the building premises known as No. 405, 407, 409 and 411 Race Course Road. These are separate units in a 4-storey building with
a shop at the first storey and two units of flats above it. Four separate lump sum contracts were signed with the respective owners
on the Singapore Institute of Architects form of building contract, 6
th
Ed, 1999 Reprint
[note: 1]
(hereinafter “SIA contract”). The owners, termed as ‘the Employer’ in the SIA contract appointed the 1
st
Defendant, Yue Cheong Kuan, of Ben Design Architects as the architect for the building project pursuant to Clause 3 of the Articles
of Contract
[note: 2]
(“the Architect”). The 2
nd
Defendant was not involved in the project but was brought in as both Defendants are the partners of the firm of Ben Design Architects.
The proceedings and preliminary issue
3 The commencement date provided in the contract was 8 May 2001 and with the contract period stipulated as 10 months, the
completion of the project was scheduled to be on 7 March 2002. It is common ground that the Plaintiffs completed the project on
23 September 2002. Upon the completion of the works, pursuant to the Conditions of the SIA contract, the Architect should have proceeded
to issue the Completion Certificates, the Maintenance Certificates and then the Final Certificates so that the Plaintiffs as contractor
could claim the payments due to them under the SIA contract. Up to 23 August 2005 when the Plaintiffs issued the writ in this action,
these certificates had still not been issued.
4 The Plaintiffs contend that the delay by the Architect in coming up with the Final Payment Certificates had caused them
to be deprived of payments that were due to them by the Employers. Because they had been kept out of funds due to them, this resulted
in them incurring loss and expense by having to utilise their overdraft account and being charged commercial interest rates.
5 The Completion Certificates were issued only on 23 September 2005 after issue of the writ. With the Completion Certificates,
the Architect also issued the Delay Certificates followed by the Maintenance and then the Final Certificates. The Plaintiffs however
are unhappy with the certifications made by the Architect and seek declarations that the Certificates issued only recently are invalid.
6 The Plaintiffs’ cause of action against the Defendants was based on a duty of care owed to them by the Architect
in the performance of his certification duties. It was the Defendants’ contention that no such duty is recognised in Singapore
law and at the start of trial, Mr Michael Por, counsel for the Defendants, sought to have the court’s ruling on this point
which he said would dispose of the matter without the need to proceed further. Mr Andrew Hanam, counsel for the Plaintiffs, objected
to this course being taken. He argued that if the Defendants were so confident that the Plaintiffs had no cause of action, they
should have acted earlier by filing an application to strike out the action under Order 18 rule 19, or even to have the matter determined
pursuant to Order 14 rule 12. Instead, both parties had gone on to prepare for trial and the witnesses for both sides were present
in court and ready to be cross-examined on their affidavits of evidence-in-chief.
7 I agreed with Mr Hanam. The Defendants had been advised by the same set of solicitors from the very outset. They should
have taken out the necessary applications to have the issue of law determined before preparation for trial actually got underway.
Although it was within the court’s discretion to proceed as suggested by Mr Por, I thought it was not cost-effective nor a
judicious use of scarce court resources to utilise the first day of a 2-day trial for such an application as time would be taken
up to consider the various authorities and should the court rule against the Defendants, both parties would be required to return
to court subsequently for the trial. Inevitably, the parties would be put to more costs in relation to the advocates’ refresher
as well as further attendance fees and court hearing fees. I therefore directed that the trial proceed and the issue of law be
considered together with the evidence and submissions of the parties at the close of the case. This was on the basis of what I considered
optimum case management. Had the court been alerted at pre-trial stage that the Defendants intended to apply for a ruling on a preliminary
point of law, it would have provided the parties with a one-day hearing slot so that the matter could be argued and the further conduct
of the case await the outcome of the ruling without any loss of court days. I also considered that the witnesses had set aside their
time to give evidence on the hearing dates; to proceed as per Mr Por’s application would inevitably lead to an adjournment
of the trial as far as the witnesses were concerned. Lawyers advising clients in civil proceedings should bear these considerations
in mind and where an appropriate application may dispose of a matter without trial, this should be taken out as early as the rules
of court allow in order to reap savings of costs for their clients as well as savings in terms of court resources which are funded
on the public purse.
8 On the same note, I should also record the court’s displeasure at late interlocutory applications that are taken
out by counsel and fixed to be heard by the trial judge on the day of trial. In the present case, the Plaintiffs had issued their
writ in the Magistrate’s Court as the quantum of damages claimed being only $17,800 was well within the Magistrate’s
Courts’ jurisdiction. Just before trial, Mr Hanam applied
[note: 3]
to have the Plaintiffs’ action transferred from the Magistrate’s Court to the District Court on account of the remedies
prayed for in the Plaintiffs’ Amended Statement of Claim which were thought to be beyond the powers of the Magistrate’s
Court. I granted the application, but not before hearing counsel’s arguments for about an hour. The suit originally numbered
as MC 19883 of 2005 was thereafter designated DC 2381 of 2006. Such an application should have been dealt with prior to trial so
as not to eat into the limited trial time.
The Pleadings – Plaintiffs’ case
9 The case framed by the Plaintiffs against the Defendants as appears from their Amended Statement of Claim, was as follows:
‘5. The Plaintiff completed the works on or about 23 September 2002 but the Defendant failed to issue a Completion Certificate,
the Maintenance Certificate or the Final payment certificate.
6. Notwithstanding the above, the temporary occupation permit (“TOP”) was obtained on 9 January 2003 for No.
405, on 27 December 2002 for No. 407, on 23 December 2002 for No. 409 and on 15 January 2003 for No. 411.
7. The Plaintiff avers that the Defendant has beached their duty as a certifier to act independently and to issue the certificates
within a reasonable time after the works were completed.
8 The Plaintiff avers that the Completion Certificate should have been issued on 23 September 2002, the Maintenance Certificate
within 12 months thereafter on 23 September 2003 and the Final Payment Certificate within 3 months thereafter on 23 December 2003.
9 As a result of the Defendant’s failure to issue the Final Payment Certificate, the owners have not and are not required
to make final payment to the Plaintiff and the Plaintiff has been deprived of their fees. Further the Plaintiff was put to loss
and expenses by having to obtain loans at commercial rates in order to meet their financial obligations and expenses as a result
of being kept out of their fees.
10 The Plaintiff submitted their final accounts to the Defendant on 9 December 2003 and 26 December 2003 and sought the Final
Payment Certificate. Numerous reminders were sent by the Plaintiff for the Final Payment Certificate on 7 April 2004, 24 May 2004,
4 February 2005, and 11 March 2005 but the Defendant failed to provide the Final Payment Certificate. The Defendant in fact on 20
July 2004 wrote to say that it would be given “by the end of this week”. On 17 March 2005 the Defendant wrote to say
that it would be given by 15 April 2005. As recent as 3 August 2005, the Plaintiff through their solicitors wrote to the Defendant
for the Final Payment Certificate and were given until 11 August 2005 to issue the Certificates. Upon the Defendant’s request,
the time was extended to 18 August 2005 for compliance. However, the Defendant has not provided the Final Payment Certificates at
all.
11 After the commencement of proceedings, the Defendant on 23 September 2005 issued delay certificates in respect of the
works alleging that the Plaintiff has caused delay in the completion of the works rendering the Plaintiff liable for liquidated damages
to the owners. The Plaintiff avers that the Defendant has improperly issued the Delay Certificates and that they are not responsible
for any delays and that the Delay Certificates should be set aside and declared invalid.’
10 The remedies claimed by the Plaintiffs in their Writ were
inter alia
:
a. an order for the Defendant to issue the Final Payment Certificates in respect of No. 405, 407, 409 and 411 Race Course
Road Singapore
b. a declaration that the Defendant is liable to the Plaintiff for loss of profit and/or loss of interest arising from the
failure and/or delay to issue the Final payment Certificates
c. an order that the Delay Certificates in respect of No. 405, 407, 409 and 411 Race Course Road dated 23 September 2005
issued by the Defendant be set aside and a declaration that the Delay Certificates are invalid
d. damages to be assessed
11 The first prayer was rendered unnecessary as the Final Certificates had been issued by the time the matter came up for
trial.
The Defendant’s case
12 In their Amended Defence filed on 17 October 2005, the Defendants essentially denied the Plaintiffs’ claim and pleaded
that:
‘2 ... the maintenance Certificate and the Final Payment Certificate have not been issued todate due to the Plaintiffs’
failure to complete the Works and/or to rectify outstanding defects. In respect of the Completion Certificates, these were issued
on 23 September 2005. The Defendants shall aver that the Contract Completion Date was 7 March 2002, and based on the Extension of
Time granted in the aggregate of 164 days, the Extended Completion Date was 18 August 2002. The actual Completion Date as certified
was 23 September 2002. In the circumstances, Delay Certificates were duly issued on 23 September 2005.
3 The Defendants further aver that to date, outstanding and/or defective works have not been carried out as set out in the
Completion Certificates. At all material times, the Plaintiffs were fully aware of the scope of such outstanding and/or defective
works. In fact, the delay in the issuance of the Completion Certificates and the Delay Certificates was to facilitate the Plaintiffs
and the owners to reach an amicable agreement on the undertaking of the said works as well as the issue of Liquidated Damages. However,
despite several discussions since September 2002 to date between the Plaintiffs and the owners, and notwithstanding that the Plaintiffs
had undertaken some other rectification works to date (thereby reducing the list of outstanding and/or defective works to the present
list), no amicable resolution was reached between the said parties. Hence, the Completion Certificates and the Delay Certificates
were duly issued pursuant to the Defendants’ scope of appointment.’
13 The Defendants denied that they owed any duty of care to the Plaintiffs. They attributed the delay in the issuance of
the various certificates to the Plaintiffs’ failure to complete their contractual obligations.
Issue of Law – Duty of care of Architect to Contractor
14 The pivotal issue of law raised by the Defendants on which they had asked to be determined as a preliminary issue was on
the question framed as follows:
“Does an Architect owe a duty of care to the Main Contractor in respect of the Architect’s certification duties?”
15 Counsel for the Plaintiffs submitted on this issue as follows:
‘The duty of an architect in carrying out his certification duties was dealt with by the High Court and the Court of Appeal
in
Hiap Hong & Co Pte Ltd v Hong Huat Development Co Pte Ltd
The Court of Appeal did not over-rule or disagree with the dicta of Justice Woo at paragraph 123 of the High Court decision where
His Honour stated:
“It is the architect’s legal duty to issue certificates. It is not part of such a duty for him to seek concurrence from
the owner and the contractor. He may seek their responses but not their instructions. Also, he is not to delay for an unduly long
period the issuance of the certificate pending their responses. If an architect sits by and waits for the owner and contractor to
respond or to concur, the architect would have failed to discharge his duty.”’
16 Mr Hanam relied in particular on the following passage in Woo Bih Li JC’s judgment in
Hong Huat Devt Co. Pte Ltd v Hiap Hong & Co Pte Ltd
“However, the position in Singapore is different. For example, in
RSP Architects Planners & Engineers v Ocean Front Pte Ltd
In
RSP Architects Planners & Engineers (Raglan Squire & Partners FE) v Management Corporation Strata Title Plan No 1075 &
Anor
I think that a strong argument can be made that an architect/certifier does owe a duty of care not only to the owner but also to
the contractor to avoid pure economic loss. An architect must know that both intend to rely on his fairness as well as his skill
and judgment as a certifier, as was mentioned in
Jones v St John’s College
LR 6 QB and cited in
Kempster
, (see paragraph 92 above). See also the judgment of Bowen LJ in
Jackson v Barry Railway Co
[1892] UKLawRpCh 172; (1893) 1 Ch 238 at p.247 which was cited with approval by the Court of Appeal in
Nelson Carlton Construction
at p.150 and 153. The architect must also know that if he is negligent in issuing certificates he might cause loss to one of these
parties.
17 Counsel for the Defendants also cited the Court of Appeal decision in
Hiap Hong & Co Pte Ltd v Hong Huat Development Co Pte Ltd
18 In
Pacific Associates
, a contractor had claimed damages for economic loss against the engineer alleging negligent certification and breach of duty to
act fairly and impartially in administering the contract. The contract contained an arbitration clause and a disclaimer under which
the engineer was not to be held liable for any acts or omissions under the contract. The contractor’s claim was struck out
by the High Court as disclosing no reasonable cause of action. The Court of Appeal upheld the decision at first instance after reviewing
existing authorities and ruled that there was no basis to impose a duty of care on the engineer to prevent economic loss to the contractor.
19 Leading authors like
Keating
have regarded the decision in
Pacific Associates
as of general application – it seemed the existence of the arbitration clause enabling the contractor to challenge certificates
was important, if not decisive on the question of the imposition of a duty of care by the certifying consultant whether architect
or engineer. Mr Por contended that the reasoning in
Pacific Associates
is equally applicable in the case before me since by the arbitration clause in the SIA form of contract, the Plaintiffs have recourse
against the employer under the contract
vis-a-vis
any dispute in respect of certification. They should therefore be bound by their contractual remedies and no duty of care can be
owed by the Defendants.
20 Mr Por argued further that Woo JC’s decision in
Hiap Hong
and in particular his dicta (quoted in paragraphs 15 and 16 above) which form the plank of the Plaintiffs’ case should be distinguished
in the light of more recent decisions in particular
Man B & W Diesel SE Asia Pte Ltd & Anor v PT Bumi International Tankers and another appeal
Woo Bih Li JC’s decision in
Hiap Hong
21 The starting point in my deliberations on this issue of duty of care must be the decision of Judicial Commissioner Woo
Bih Li (as His Honour then was) in
Hong Huat Devt Co. Pte Ltd v Hiap Hong & Co Pte Ltd
22 Woo J.C. (as he then was) in his judgment disagreed with the position taken by the arbitrator. In a detailed discussion
on the functions and role of the architect, His Honour dealt with both caselaw authorities and textbooks on the subject and concluded
that in relation to the certifying functions of the architect, the employers have an implied duty not to interfere with the discharge
of the architect’s duty. The employers have an implied duty to do all things reasonably necessary to enable the architect
to discharge his duty properly but such an implied duty did not require the employers to tell the architect what to do. Consequently,
even if the architect had failed to issue various certificates on time, the employers are not liable for the architect’s default.
23 Woo JC stated that the concept of the dual functions
[note: 5]
of the architect recognises that when the architect is a certifier, he has to act fairly and independently and the architect cannot
act fairly and independently if in that capacity he is also acting as agent of the employer. His Honour went on to say that there
is no valid basis in principle to say that an owner must ensure the proper discharge by the architect of his duties such as to render
an owner liable if the certifier fails to discharge his duty properly since the certifier is supposed to act independently.
24 In ruling against the implied term argument made by the contractor, His Honour reasoned as follows:
‘If an architect is to decide on the issue of certificates and the amounts thereof without following the instructions or orders
of the owners, then the owners cannot be obliged or entitled to give such instructions or orders whether it be to withhold a certificate,
or for that matter, to issue a certificate. The withholding and the issue of a certificate are both sides of the same coin. Accordingly,
an owner cannot be liable for not giving such instructions or orders.
Indeed, should an architect issue a certificate because he was told to do so by an owner, and not because he himself thought it was
right to do so, he would have forfeited his independence ..’
25 In further support of his views, His Honour also relied on the following passage from Emden’s Construction Law Issue
56:
‘When issuing certificates the architect or other certifier is not acting as the employer’s agent but must form and act
on his own opinion. That being so, he is bound to act independently; it is his duty to hear what both parties (ie employer and contractor)
have to say and if he gives opportunity to one side he should give equal opportunity to the other. Moreover he must act impartially.
He will not be acting impartially if he allows the employer to interfere with his independent judgement when issuing certificates.’
26 It was also argued for the contractor that if the owner were not liable for the architect’s defaults where the architect
acts as certifier, then a contractor would have no recourse at all in the situation where certificates have been issued late following
the English case of
Pacific v Baxter
. It was in answer to this argument that Woo JC had opined
obiter
that a strong argument could be made that an architect/certifier does owe a duty of care not only to the owner but also to the contractor
to avoid pure economic loss and the architect must know that if he were negligent in issuing certificates he might cause loss to
these parties.
27 The dicta of Woo JC followed His Honour’s view that the position in Singapore with regard to recovery of pure economic
loss in tort is different from that in England as shown by the English courts’ decisions in
D&F Estates Ltd & Ors v Church Commissions for England & Ors
28 In the subsequent case,
RSP Architects Planners & Engineers (Raglan Squire & Partners FE) v Management Corporation Strata Title Plan No 1075 &
Anor
Court of Appeal decision in
Hiap Hong
29 The contractor, Hiap Hong & Co Pte Ltd, being dissatisfied with Woo Bih Li JC’s judgment had appealed to the
Court of Appeal. The appeal was dismissed. The Court of Appeal began its analysis of the case authorities cited by the contractor
by endorsing the words of Lord Reid in
Sutcliffe v Thackrah
30 It is also settled law that an owner/employer and a contractor would have made their contract on the understanding that
in all matters where the architect has to apply his professional skill and judgment, the architect will act in a fair and unbiased
manner in applying the terms of the contract. Such matters would include the issue of certificates for payment and the grants of
extension of time. While the architect under the building contract is the employer’s agent, in the exercise of his functions
requiring skill and judgment, he must act fairly and professionally and neither party should seek to unfairly or unduly influence
him in the discharge of those functions.
31 Thus, in exercising the function of certification the architect cannot be the agent of the owners - the nature of that
function is wholly inconsistent with the architect being the agent of the owners. While it is true that the architect is employed
by the owner and to that extent the owner has control over him, such control must necessarily be confined to matters in which the
architect acts as the owner’s agent and not in relation to matters where the architect is accorded a special role under the
contract and where he is expected to exercise independent judgment.
32 The Court of Appeal held that there was no justification to imply such a wide-ranging term as argued for by the contractor,
bearing in mind the independent nature of the certification function of the architect postulated under a building contract. It cannot
be the duty of an owner/employer to oversee the architect in the discharge of that function. In fact, he should not be doing that
as it could undermine the independent nature of that function.
Effect of
Hiap Hong
33 It is clear from both the judgments of the High Court and Court of Appeal in the
Hiap Hong
case that where an architect in his role as certifier is guilty of delay in issuing certificates or fails to issue them, the contractor
has no recourse against the employer as the architect cannot be said to be an agent of the employer when he exercises the certifying
function.
34 It is noted that the Court of Appeal made no comments with respect to the Woo JC’s views
[note: 6]
that the contractor might have a direct claim in negligence against the architect who fails to exercise due care and skill in his
certification. The question therefore remains open whether the architect is liable to the contractor when he fails to act diligently
in his certifying capacity.
35 Woo JC had postulated his view on the Court of Appeal’s extension of duty of care to avoid pure economic loss by
developer and architect to the management corporation in the case of
RSP Architects Planners & Engineers v Ocean Front Pte Ltd & Anor
Man B&W Diesel
36 This case did not concern defects in buildings but defects in a ship. PT Bumi was the owner of an oil tanker. It was
built by a Malaysian company, Malaysian Shipyard & Engineering Sdn Bhd (‘MSE’). The tanker was to be employed on
a long-term charterparty to Pertamina, the Indonesian oil company. The shipbuilding contract contemplated that the main engine would
be supplied by a third party. MSE obtained the engine from Man B&W Diesel SE Asia Pte Ltd (‘MBS’) which was a Singapore
company that sold and serviced engines manufactured by its UK parent company, Mirrlees Blackstone Ltd (‘MBUK’).
37 Within weeks of the delivery of the vessel to owner, the engine encountered problems and eventually broke down. PT Bumi
commenced an action in tort against MBS and MBUK alleging that the engine was negligently designed and/or manufactured and claiming
that MBS and MBUK had breached their duty of care. The losses claimed by PT Bumi included the cost of the engine and the loss of
rental income which it would have earned from its charter. These claims were allowed by the High Court which followed the Court
of Appeal’s decisions in
Ocean Front
and
Eastern Lagoon
and held that MBS and MBUK owed a duty of care to PT Bumi.
38 The Court of Appeal analysed the decisions in this area of the law starting with
Dutton v Bognor Regis Urban District Council
39 The Court of Appeal also looked at cases in the jurisdictions of Australia, New Zealand and Canada where
Murphy
was not followed. It then revisited its landmark decision of
Ocean Front
which had held that the developer of a condominium was liable in tort for economic losses suffered by the management corporation
of the development and how the 2-stage test in
Anns
had been applied. It had explained that under the second step, one of the considerations was whether it would result in imposing
liability “in an indeterminate amount for an indeterminate time to an indeterminate class” and explained that in
Ocean Front
the relationship between the developer and management corporation was “as close as it could be short of actual privity of contract”
40 The Court went on further to say that there was no single rule or set of rules for determining whether a duty of care arises
in a particular circumstance, and the scope of that duty. It said that in determining whether a duty of care existed, and the scope
of such duty, all the relevant circumstances would have to be examined. The correctness of
Ocean Front
had been challenged but was reaffirmed in the subsequent decision of
Eastern Lagoon
where the architects of a condominium development were held liable to the management corporation for economic loss arising from poor
design.
41 The Court then went on to explain the limitations to
Ocean Front
in the following terms:
“The limits of
Ocean Front
33 The next question to ask is whether this court intended in
Ocean Front
to lay down a general proposition that, applying the two-step test and whatever may be the subject matter, whenever economic losses
are suffered by a party and those losses are attributable to a lack of care on the part of another party, the first party may claim
the losses from the second party. It is important to bear in mind that the court was at pains in
Ocean Front
to explain the special position of the management corporation. The court examined the scheme of things under the Strata Act and
the Common Property Maintenance Act and how the management corporation came into being. The court noted that “the management
corporation was in fact the creation of the developers”. It was in this very special factual matrix that the court came to
the view that a remedy in tort should be made available to the management corporation, who would otherwise be without a remedy.
34 It is true that the principle enunciated in
Donoghue
– namely, that when a person can or ought to appreciate that a careless act or omission on his part may result in physical
injury to other persons or their property, he owes a duty to all such persons to exercise reasonable care to avoid such careless
act or omission – has been extended to claims other than for such personal injuries or property damage: see
Hedley Byrne & Co Ltd v Heller & Partners Ltd
(emphasis mine)
42 The Court then analysed the facts in
Man B& W Diesel
where there was a contract between MSE and PT Bumi which contained a limited warranty and several limitation clauses. The Court
of Appeal found that PT Bumi could have entered into a direct contract with the supplier of the engine but chose not to. By entering
into the contract with MSE on the terms as agreed with the latter, it had committed itself to looking to MSE for redress. In such
circumstances, there was no basis for any finding that PT Bumi had relied on any promise by MBS or MBUK to deliver a satisfactory
engine. To infer a duty of care on MBS and MBUK would run counter to the arrangement that PT Bumi had chosen to make with MSE.
While MBS and MBUK owed a duty of care to MSE by virtue of the subcontract, there was no assumption of duty by MBS or MBUK
vis-a-vis
PT Bumi. PT Bumi could altered the contractual structure and made MBS or MBUK assume that responsibility but had instead elected
to distance itself from all the subcontractors including MBS and MBUK. In the circumstances, MBS and MBUK could not have owed a
duty of care to PT Bumi.
Effect of
Man B&W
43 It is clear from
Man B&W
that recovery for economic loss in tort cannot be extended to chattels where the contractual arrangements chosen by the parties precluded
a finding of a duty of care. However, it did not completely rule out that possibility.
44 Although there appears to be some dicta from the Court of Appeal pertaining to
Ocean Front
which seem to suggest that they have restricted its application to the special fact situation there,
viz
. -
“While in
Ocean Front
this court allowed a claim in economic loss in relation to real property, it must be reiterated that there the court was of the
view that the relationship between the developer and the management corporation was as close to a contract as could reasonably be.
It seems to us that
Ocean Front
should be treated as a special case in the context of the statutory scheme of things under the Strata Act or at least be confined
to defects in buildings.”
I note that the Court of Appeal declined to make any general pronouncements that would shut out all other claims for economic loss.
It has been acknowledged that this is an extremely difficult area of the law as any extension of the
Donoghue
principle will have far-reaching consequences.
45 In answer to the question – “Should the principle of duty of acre enunciated in
Donoghue
be further extended to cover economic losses arising from the supply of chattels?”, the Court of Appeal was content to state
that “the existence of a duty or otherwise must depend on the facts of each case. It would be unwise to generalise”.
46 What can be distilled from the entire judgment of
Man B&W
is that one must proceed with extreme caution before imposing a duty of care in a given situation. Where the claimant for economic
loss would have been able to seek redress through its contractual remedies, there would be no basis for the law to infer any duty
of care outside of the contractual framework. It is only in very limited situations where the party who has suffered losses would
be left without a remedy that a duty would be inferred bearing in mind the following dicta of the Court of Appeal which should serve
as a guide:
“ ... the
Donoghue
principle is not a statutory definition. Its application has not remained static. It is evolving. It offers an
avenue of redress for losses suffered by a person on account of the acts or omissions of another, where such losses would otherwise
be without a remedy.”
Architect owes duty of care
47 The Plaintiffs in the case before me were claiming for losses arising from alleged delays on the part of the Architect
in performing his certifying function under the SIA contract. Just as in the case of
Hiap Hong
, the contractor’s loss here could not be recoverable from the owner since there can be no implied term that the owner was
required to ensure that the Architect would duly discharge his duties under the contract. In fact, it is imperative that the owner
leaves the Architect to exercise his professional skill and duties
vis-a-vis
the contract without any interference.
48 It can, however, be envisaged situations where the Architect fails to act with due care and skill. For example, in a booming
construction market an architect’s resources could be stretched to numerous projects and he fails to act with reasonable diligence
and expedition such that projects which have been completed are awaiting his certification before accounts can be finalised and payments
effected as contemplated by the contract. The consequences of the architect’s conduct in such an instance would clearly be
prejudicial to the contractor whose viability is dependent on healthy cash flows. No disadvantage is suffered by the owners since
they have the benefit of the completed building without having to make any payments until the architect provides his certification.
It would seem that in such a scenario, the architect must know that when he fails to act with due care and diligence in the issuing
of certificates he might cause loss to the contractor. The contractor relies on the architect’s certifications for the conduct
of his business but those certificates are not forthcoming.
49 Having examined the circumstances of the parties in the present case, I have to say that the relationship between the Plaintiffs
and the Architect is of such a close proximity that the Architect must know that if he is negligent in his duty of issuing the relevant
certificates he is likely to cause loss to the contractor. If the Architect inexcusably delays issuance of certificates which he
knows are prerequisite to the contractor’s claims for payment from the owner, he should be aware that the contractor may suffer
loss as a result of such delay. Going by the
Hiap Hong
decisions, such loss is not recoverable against the owner. It seemed to me, therefore, following the Court of Appeal’s reasoning
in
Man B&W
, this would be a situation where
Ocean Front
principles can and should be extended. If not, the contractor would be without an avenue of redress.
50 Counsel for Defendants had submitted that the Plaintiffs here should be left to pursue their remedies under the contract
against the employers. He says their recourse is to commence an arbitration against the employers. However, claims for loss in
terms of interest charges arising from the Architect’s delay in issuing certificates or issuing them wrongly is not a claim
that would be allowed against the owner in any event since no fault can be attributed to the owner when the professional he has engaged
sits on the job so to speak. The contractor clearly has no other recourse open to him than to sue the professional whose appointment
under the contract is to issue certificates. The argument that the contractor would be accorded a separate additional remedy simply
does not apply here because there is no remedy available to the contractor against the owner who cannot be faulted with the acts
and omissions of the architect-certifier.
51 It also seemed to me that there is sufficient proximity between the parties which would give rise to a duty of care. It
would not be wrong to describe the relationship here between the contractor and the Architect as being so close as it could be short
of actual privity of contract thereby bringing into play the
Ocean Front
principles.
Yee Hong
52 Counsel for Defendants also referred to the High Court decision of
Yee Hong Pte Ltd v Tan Chye Hee Andrew
53 Mr Por submitted that
Yee Hong
by which this Court is bound is conclusive authority that an architect does not owe a duty of care to the contractor to avoid pure
economic loss. I respectfully differ. On reading
Yee Hong
, it is clear that the
ratio
in that case is that a stay of proceedings in favour of arbitration would be granted in a dispute between the contractor and architect
where the dispute between the contractor and employer had already been referred to arbitration. This would avoid multiplicity of
proceedings. In fact at paragraph 30 of her judgment, Lai Siu Chiu J. had stated as follows:
“.. I did not strike out the claim under O 18 r 19(1)(a), r 19(1)(b) or r 19(1)(c) of the Rules of Court (Cap 322, R 5, 2001
Rev Ed) as prayed for in the Application, I merely directed a stay of the entire proceedings. Ordering the Plaintiff to arbitrate
its claim against the Defendant (who agreed to be bound thereby) was not tantamount to saying that the Plaintiff’s claim had
no merits. Far from it. It only meant that there was another, and in my view more suitable, forum for the three parties involved
to have all their disputes relating to one project determined.”
54 Her Honour did allude to the Court of Appeal decision in
Man B&W
and opined that –
“Chao Hick Tin JA in
Man B&W
cautioned that the principles in (
Ocean Front
) and in (
Eastern Lagoon
) should not be extended to new situations, save where the facts are identical.”
However, I would have to say, with the greatest of respect to the learned Judge that on my reading of the Court of Appeal judgment
in
Man B&W
, the Court of Appeal had in fact declined to make such a bold pronouncement.
[note: 8]
55 There is also dicta from
Yee Hong
where the learned Judge had mentioned that it was wrong for the Plaintiff to rely on Woo JC’s decision in
Hiap Hong
. See below:
“I have taken pains to review
Ocean Front
and the 1999 case as neither would appear to support the Plaintiff’s contention that the Defendant as an architect per se owed
it a duty which counsel for the Plaintiff said had been breached 11 times over. I believe counsel for the Plaintiff had in this
regard relied on the following extract from Woo JC’s decision in the
Hiap Hong
case in which after reviewing
Ocean Front
and the 1999 case, Woo JC said at [193]:
I think that a strong argument can be made that an architect/certifier does owe a duty of care not only to the owner but also to
the contractor to avoid pure economic loss. An architect must know that both intend to rely on his fairness as well as his skill
and judgment as a certifier, as was mentioned in
Jones v St John’s College
LR 6 QB and cited in
Kempster
, (see paragraph 92 above). See also the judgment of
Bowen LJ in Jackson v Barry Railway
Co [1892] UKLawRpCh 172; (1893) 1 Ch 238 at p.247 which was cited with approval by the Court of Appeal in
Nelson Carlton Construction
at p.150 and 153. The architect must also know that if he is negligent in issuing certificates he might cause loss to one of these
parties.
However, what counsel may have overlooked is that in a later paragraph at [195], Woo JC said:
“I need say no more on this point as it is not necessary for me to decide whether an architect, as certifier, owes a duty of
care to the contractor.”
Consequently, it would be wrong for the Plaintiff to rely on Woo JC’s decision as authority for the proposition that the Plaintiff
could sue the Third Party’s architect for economic loss.”
56 It must be noted that the learned Judge’s comments above quoted does not form the
ratio decidendi
of the decision in
Yee Hong
. And since Woo JC’s dicta at paragraph 193 of His Honour’s judgment in
Hiap Hong
were also made obiter, the comments of Lai Siu Chiu J in
Yee Hong
thereon would, with the greatest deference and respect to the learned Judge and in my humble opinion, be really obiter on obiter.
I should also point out that Lai J. did not in her judgment state that Woo JC was wrong. It bears remembering that the Court of
Appeal in
Hiap Hong
had not said anything in disapproval of Woo JC’s dicta.
57 For the reasons given above, I ruled against the Defendants on the issue of law and hold that the Architect does owe a
duty of care to the contractor when acting in his role of certifier under the provisions of the SIA Contract.
Did Architect breach his duty?
58 Having determined the issue of law in the Plaintiffs’ favour, the next question I had to determine was whether on
the facts pleaded and evidence adduced by the parties, the Architect was in breach of his duty. The Plaintiffs’ case is that
Defendants had failed to act independently and failed to issue certificates within a reasonable time.
59 The pleaded facts are in paragraphs 7 and 8 of Amended Statement of Claim which I have reproduced at paragraph 8 of these
Grounds. In essence, the Plaintiffs’ complaint was that the Architect as certifier had breached his duty to “act independently
and to issue the certificates within a reasonable time after the works were completed. In paragraph 8, the Plaintiffs had itemised
the breaches of the Architect as follows:
1. He should have issued the Completion Certificate on 23 September 2002.
2. He should have issued the Maintenance Certificate on 23 September 2003 (i.e. 12 months after completion).
3. He should have issued the Final Payment Certificate
[note: 9]
on 23 December 2003 (i.e. 3 months after Maintenance Certificate)
60 The certificates and the time frame for its issuance as provided for in the SIA Contract are set out below:
Certificate
Timeframe
Clause in SIA
Actual Date of issue
Completion Certificate
When the works appear to
Clause 24(4)
23 Sep 2005
Maintenance Certificate
When all defects notified by the architect has been made good
Clause 27(5)
21 Nov 2005
Final Certificate
Within 3 months of receipt of Final Claim documents or issue of Maintenance Certificates, whichever is the later
Clause 31(10)(a)
Dec 2005
Jan 2006
61 The period of reckoning in respect of the Maintenance Certificates and Final Certificates commences from the date when the
Completion Certificate should have been issued. The Plaintiffs’ case is that the Architect should have issued this certificate
on 23 September 2002. In order to determine when the Completion Certificate should have been issued, it was necessary for me to
refer to the following provisions of the SIA contract:
22 TIME FOR COMPLETION
22(1) The Contractor shall complete the Works on or before the Date of Completion stated in the Appendix hereto or by such date
as modified and recalculated pursuant to Clause 10(1) of these Conditions, or by such Date or modified Date as further extended
pursuant to the next following clause of these Conditions, whichever is the latest.
23 EXTENSION OF TIME
23(1) Grounds
The Contract Period and the Date for Completion may be extended and re-calculated, subject to compliance by the Contractor with the
requirements of the next following sub-clause, by such further periods and until such further dates as may reasonably reflect any
delay in completion which, notwithstanding due diligence and the taking of all reasonable steps by the Contractor by the Contractor
to avoid or reduce the same, has been caused by
[grounds for extension set out in sub-clauses (a) to (p) omitted ]
23(2) Notice
It shall be a condition precedent to an extension of time by the Architect under any provision of this Contract including the present
clause (unless the Architect has already informed the Contractor of his willingness to grant an extension of time) that the Contractor
shall within 28 days notify the Architect in writing of any event or direction or instruction which he considers entitle him to
an extension of time, together with a sufficient explanation of the reasons why delay to completion will result. Upon receipt
of such notification the Architect, within one month of a request to do so by the Contractor specifically mentioning this sub-clause,
shall inform the Contractor whether or not he considers the event or instruction or direction in principle entitles the Contractor
to an extension of time.
23(3) Time for Extension
After any delaying factor in respect of which an extension of time is permitted by the Contract has ceased to operate and it is possible
to decide the length of the period of extension beyond the Contract Completion Date (or any previous extension thereof) in respect
of such matter, the Architect shall determine such period of extension and shall at any time up to and including the issue of the
Final Certificate notify the Contractor in writing of his decision and estimate of the same.
23(4) Request for Information
The Architect may in writing request the Contractor for sufficient explanation, information, particulars or materials as will enable
him to estimate the period of extension of time to be granted to the Contractor. The Contractor shall within 28 days after receipt
of such request furnish to the Architect the information, particulars or materials requested.
The Architect shall not be required under Clause 23(3) to decide and estimate the period of extension of time to be granted to the
Contractor unless he is in receipt of the sufficient explanation, information, particulars or materials requested.
DELAY IN COMPLETION AND LIQUIDATED DAMAGES
24(1) Delay Certificate
After the latest Date for Completion of the Works pursuant to clause 22(1) of the Conditions has passed, then if at the said date
there are no other matters entitling the Contractor to an extension of time and the Works nevertheless remain incomplete, the Architect
may at any time thereafter up to and including the issue of the Final Certificate give a certificate give a certificate setting out
the Completion Date (if necessary modified or re-calculated under clause 10(1) of these Conditions); the total period of extension
of time (if any); the consequential extended Contract Completion Date (if any); and certifying that the Contractor is in default
in not having completed the Works by the stated Completion Date or Extended Completion Date (as the case may be). Such certificate
shall be issued to the Employer with a copy to the Contractor, and is hereinafter called a “Delay Certificate”.
24(2) Liquidated Damages
Upon receipt of a Delay Certificate the Employer shall be entitled to recover from the Contractor liquidated damages calculated at
the rate stated in the Appendix to the Conditions from the date of default certified by the Architect for the period during which
the Works shall remain incomplete, and may but shall not be bound to deduct such liquidated damages, whether in whole or in part,
from any monies due under the Contract at any time.
24(3) Termination of Delay and Further Delay
[Clause 24(3) omitted]
24(4) Completion
Subject to the provisions of sub-clause (3) of this Condition as to the effect of Termination of Delay Certificates, the liability
of the Contractor to pay further liquidated damages under sub-clause (3) of this Condition shall cease, and the Contract be deemed
to be completed for this purpose, upon the issue by the Architect of his certificate under this sub-clause that the Works have been
completed. Such certificate is referred to in this Contract as a “Completion Certificate”, and shall be issued by the
Architect when the Works appear to be complete and to comply with the Contract in all respects.
24(5) Outstanding Works
Provided that, without prejudice to the Architect’s powers under clause 26(3) of the Conditions, if any minor works are outstanding
which can be completed following the removal of the Contractor’s site organisation and all major plant or equipment, and without
unreasonable disturbance of the Employer’s full enjoyment and occupation of the property, then upon the Contractor undertaking
in writing to complete such outstanding work within such time or times as may be stipulated by the Architect, the Architect may (but
shall not be bound to) issue a Completion Certificate, which shall record such outstanding work by way of a schedule attached to
the certificate, together with the terms of the agreement with the Contractor for its completion, including any agreement as to withholding
and subsequently releasing any part of the Retention Monies otherwise payable on the issue of the certificate in accordance with
clause 31(7) of these Conditions.
62 The Plaintiffs completed the works on 23 September 2002. In the Appendix to the contract, the parties had stipulated the
Completion Date as 7 March 2002, and liquidated damages would be imposed pursuant to Clause 24(2) at S$800.00 per day. The Architect
had allowed successive extensions of time for completion of the works until the final extension of time granted up to 18 August 2002.
From the documents and correspondence set out in the Agreed Bundle, it appeared that both the Plaintiffs and the Employer were unhappy
with the extensions of time granted, the Employer’s position being a shorter extension should have been granted, thus rendering
the Plaintiffs liable to higher amounts of liquidated damages whilst the Plaintiffs sought a longer extension up to mid-October 2002.
63 The contractual provisions set out above contemplate that the Architect would need some time to ascertain the completion
date before he issues the Completion Certificate. The operation of clauses 23 and 24 of the SIA Contract is such that the determination
of the completion date and the time for extension go hand-in hand. Reading Clause 24(1) in particular, it is clear that the Architect
embarks on the computation for issuance of a Delay Certificate only after the latest date for completion has passed. The Architect
had granted the Plaintiffs up to 18 August 2002 to complete the works but they were only able to complete the same on 23 September
2002. The Architect would require time to investigate that the works under the contract had indeed been completed and that they
“comply with the Contract in all respects”
[note: 10]
. It would be physically impossible for the Architect to issue the Completion Certificate on 23 September 2002 as pleaded by the
Plaintiffs. It is noted that the building premises were handed over to the owner (in respect of unit 405 Race Course Road) only
in December 2002.
64 I also noted that the provisions in Clauses 23(3) and 24(1) in particular allow the Architect time
up to the issue of the Final Certificate
to determine the period of extension of time and to issue the Delay Certificate. In the circumstances of the present case, it would
be most unreasonable to expect the Architect to come up with the Completion Certificate the very moment that the Contractor has finished
his work without giving him time to do the necessary evaluations.
65 In relation to the Maintenance Certificate and the Final Certificate, the relevant provisions are set out below:
27 MAINTENANCE FOLLOWING COMPLETION
27(1) Maintenance Period
Subject to clause 26 of these Conditions in the case of an Occupied Part of the Works, the Maintenance Period stated in the Appendix
hereto shall commence upon the issue of a Completion Certificate under clause 24(4) or 25 of these Conditions. During such period:
(a) the Contractor shall complete the outstanding work (if any) listed in and in accordance with the terms recorded in the
Completion Certificate, and
(b) the Architect may at any time following the Completion Certificate give directions or instructions for the making good
by the Contractor of any defects, omissions or other faults which may be or become apparent in the Works. If the cause of the same
is due or found to be due to any breach by the Contractor of any of his obligations expressed or implied under the Contract, ...then
the Contractor shall be responsible for repairing and making good the same or making arrangements therefore at his own expense on
the direction of the Architect. If the said defects have occurred despite compliance with the Contract in all respects by the Contractor
... he shall be entitled to payment on a reasonable price basis for compliance with any instruction of the Architect to make good
the same.
27(2) Schedule of Defects
Not later than 14 days after the expiry of the Maintenance Period, the Architect shall deliver a Schedule of Defects specifying all
remaining defects, omissions and other faults apparent at the date of delivery of the Schedule, and on receipt of directions or instruction
to do so the Contractor shall forthwith repair and make good the same on the same terms as defects notified to the Contractor under
sub-clause (1)(b) of this Condition.
27(5) Maintenance Certificate
When all defects notified by the Architect to the Contractor under sub-clauses (1), (2) or (3) hereof have either been made good
by the Contractor in compliance with the Architect’s directions or instructions, or have been dealt with by a direction under
sub-clause (4) hereof, the Architect shall issue a certificate to that effect (hereinafter called a “Maintenance Certificate”).
Such Certificate shall finally discharge the Contractor from any further physical attendance upon the Works for the purpose of making
good defects, but shall not prejudice any other rights of the Employer in regard to defective work, or any other breaches of contract
whether previously or subsequently discovered.
31(10)(a) FINAL CERTIFICATE
Within 3 months of receipt from the Contractor of the documentation referred to in the preceding sub-clause of this Condition or
of the issue of the Maintenance Certificate (whichever is the later) the Architect shall issue a Final Certificate. Such Certificate
shall be supported by documents showing the Architect’s final measurement and valuation of the Works in accordance with all
the terms of the Contract, and after setting out and allowing for all payments or other expenditure of the Employer or any permitted
deductions by him shall state any final balance due from the Employer to the Contractor or from the Contractor to the Employer, as
the case may be, which shall thereupon become a debt due. Such certificate shall also take account expressly of any outstanding
permitted deductions not yet made by the Employer under the terms of the Contract whether by way of liquidated damages or otherwise
(unless the Employer shall inform the Architect of his decision to forego or postpone his right to the same).
31(11) Effect of Architect’s Certificates
No certificate of the Architect under this Contract shall be final and binding in any dispute between the Employer and the Contractor,
whether before an arbitrator or in the Courts, save only that, in the absence of fraud or improper pressure or interference of either
party, full effect by way of summary judgment or interim award or otherwise shall, in the absence of express provision, be given
to all decisions and certificates of the Architect .. whether for payment or other wise, until final judgment or award, as the case
may be, and until such final judgment or award such decision or certificates shall ... be binding on the Employer and the Contractor
in relation to any matter which, under the terms of the Contract, the Architect has a fact taken into account or allowed or disallowed,
or any disputed matter upon which under the terms of the Contract he has as a fact ruled, in his certificates or otherwise.
The Architect shall in all matters certify strictly in accordance with the terms of the Contract
. In any case of doubt the Architect shall, at the request of either party, state in writing within 28 days whether he has as fact
taken account of or allowed or disallowed or ruled upon any matter in his certificates, if so identifying any certificate and indicating
the amount (if any) taken into account or allowed or disallowed, or the nature of any ruling made by him, as the case may be.
(emphasis mine)
66 The Plaintiffs contend that the Maintenance Certificate should have been issued on 23 September 2003. They took this date
as being 12 months from 23 September 2002, the date when they had completed the works, as the parties had stipulated in the Appendix
for a maintenance period of 12 months and contended that they should not be required to attend to any defects notified to them beyond
this date. However, reading the entire provision of Clause 27, it appears to me that the Plaintiffs are wrong in their interpretation
of the contractual mechanism set out in Clause 27 for the issuance of the Maintenance Certificate.
67 As defined in Clause 27(1), the Maintenance Period stated in the Appendix commences
upon the issue
of the Completion Certificate under Clause 24(4) and not date of actual completion as alleged by the Plaintiffs. On my reading of
this provision, it is only until and unless a Completion Certificate is issued that the Maintenance Period starts to kick in.
68 The Completion Certificate was issued in respect of the 4 units 405, 407, 409 and 411 on 23 September 2005. From my
reading of Clauses 23 and 24, the Architect was perfectly entitled to do so since they were all issued before the Final Certificate.
The Architect was acting within the contractual provisions when he issued the Completion Certificates on 23 September 2005. As
to whether the issuance thereof being 3 years from the date of actual completion is an unreasonable length of time, more will be
said of this later.
69 So going by Clause 27(1), the Maintenance Period would therefore end only on 22 September 2006. The Architect issued the
Maintenance Certificates on 21 November 2005
[note: 11]
in accordance with Clause 27(5). The Architect was entitled to do this instead of waiting for the Maintenance Period to expire as
it appeared that the Plaintiffs had taken the position that they were not liable for the defects notified by the Architect and they
would no longer attend to the works.
70 Pursuant to Clause 31(10)(a), the Final Certificates had to be issued 3 months of receipt from the contractor of final
claim documents or issue of Maintenance Certificates whichever is the later. Since the Maintenance Certificates in respect of all
4 units were issued on 21 November 2005, the 3 months would have expired on 20 February 2006. The Final Certificate for unit 405
was issued on 1 December 2005. For units 407, 409 and 411, these were issued on 1 December 2005, 20 January 2006 and 5 December
2005 respectively. The Defendants had not passed the 3-month deadline set out in Clause 31(10)(a) and were in fact merely acting
within the contractual provisions.
Proof of breach of duty
71 The onus is on the Plaintiffs to prove that the Architect had acted in breach of his duty. Since the Plaintiffs’
cause of action was in the tort of negligence causing economic loss, it was in my view incumbent on Plaintiffs to show what a reasonably
prudent or diligent architect in the circumstances of this case would have done. In my deliberations on this point, the questions
I asked myself were: “What would have been the ‘reasonable time’ within which an architect would have issued the
Completion Certificate? Is there an industry benchmark? What is the yardstick the Court should use to determine the length of ‘reasonable
time’? Since the works had been completed on 23 September 2002, how long should the Architect have waited before proceeding
to issue his certificates?
72 The Plaintiffs are of course bound by their pleadings wherein they averred that the specific dates for the issue of the
Completion, Maintenance and Final Certificates should have been 23 September 2002, 23 September 2003 and 23 December 2003 respectively.
In order to succeed, they had to show on a balance of probabilities that a reasonably competent architect in the particular circumstances
of this case would have issued the certificates by the dates pleaded. However, no architect familiar with the SIA form of contract
was called to support the Plaintiffs’ contention that the certificates could and should have been issued within the timelines
pleaded.
73 The only witness called by the Plaintiffs to give evidence on their behalf was Wong Shui Ngian (PW-1) the Plaintiffs’
director. His evidence consisted primarily of a chronology of dates of various documents from which he concluded that there was
“excessive delay on the Defendant’s part to issue the certificates.” This was, in my view clearly inadequate.
Even relying on just PW-1’s assertions, no explanation was given in regard to the chronology to buttress the Plaintiffs’
case on delay. Was the delay to be inferred from only the two dates of 23 September 2002 to 23 September 2005? But the chronology
itself and the documents in the Agreed Bundle indicate some measure of activity on the part of the parties involved. There is also
evidence that the parties had met several times in order for disputes with regard to defects, extension of time and liquidated damages
to be amicably resolved and as stated by the 1st Defendant under cross-examination, this was the industry norm and practice, so what
would be the limits beyond which the industry would frown upon and say that the architect here has been dilatory in his conduct as
certifier in the SIA form of contract?
74 The Plaintiffs had also relied on the actual completion date of 23 September 2002 to compute the Maintenance Period and
thereafter the dates for issuance of the Maintenance Certificate and Final Certificates. As stated earlier, they had operated on
a misinterpretation of Clause 27(1) with respect to the definition of “Maintenance Period”. There can be no computation
of Maintenance Period until issue of the Completion Certificate. If the Completion Certificate was issued within the bounds of the
contract provisions, and in my finding it was so issued in this case, then the other certificates [i.e. Maintenance Certificate and
Final Certificate] issued by the Architect were similarly done within and in accordance with the contract provisions.
75 It appeared to me that the Defendant had carried out the issuance of the respective certificates within the timeframes
allowed by the SIA Contract between Plaintiff and the owners. Although at first blush, just looking at the dates
per se
, the issue of the Completion Certificates 3 years after the works had been completed appears to be inordinately long, I could not
merely by looking at these dates and nothing more make a finding that there had been a breach of duty on the part of the Architect.
The onus was on the Plaintiffs to show that the Defendants’ conduct in this respect had fallen short of the standard required
of a reasonable diligent and competent architect but they failed to do so.
Delay Certificates
76 By paragraph 11 of the Amended Statement of Claim, the Plaintiffs had amended their claim after the writ was issued to
plead that the Defendant had on 23 September 2005 after commencement of proceedings issued delay certificates which effectively rendered
them liable for liquidated damages to the owners. They alleged that these delay certificates were improperly issued and sought an
order that they be set aside and declared invalid.
77 In the course of preparing these Grounds, I noted from the endorsement on the Amended Statement of Claim that the amendment
had been made without leave of court as it was done before close of pleadings. I should state however that since the amendment would
date back to the date of the original issue of the writ which was 23 August 2005, the right, if any, on the part of the Plaintiffs
to seek such order or declaration in respect of the Delay Certificates would not yet have accrued on the date of the writ since the
Delay Certificates were issued a month after the issue of the writ. The amendment is therefore improper but no application had been
made by the Defendants to have it struck out and they had in fact pleaded to the same in their Amended Defence filed on 17 October
2005. The Plaintiffs should have filed a separate action to challenge the Delay Certificates after their issue dates.
78 Aside from the irregularity in the pleadings, the evidentiary support for the Plaintiffs’ challenge to the Delay
Certificates was also lacking. The Delay Certificates for all 4 units had been issued together with the Completion Certificates
on 23 September 2005. The Defendants had granted an extension of time of 164 days. This extension of time had taken into account
additional works which included a mechanical ventilation system for which 14 days had been awarded by the Architect. The Plaintiffs
had taken issue with the Defendants’ computation of extension of time in their letters to the Defendants dated 6 August 2002
[note: 12]
. From the documents, it appeared that the Defendants had replied on 22 August 2005 rejecting the Plaintiffs’ claim for a
longer period of extension of time. No evidence was given in PW-1’ affidavit of evidence-in-chief as to why the Defendants’
award of 164 days of extension of time was invalid.
79 It had been suggested by Mr Hanam to DW-1 in cross-examination that the extended contract completion date should have been
9 September 2002 to take into account the construction of the mechanical ventilation system. DW-1 had agreed initially that he had
made an error in his computation but clarified the next day after checking through his records that he had already factored in the
additional works when he computed the extended completion date as 18 August 2002
[note:13]
. As the Plaintiffs had adduced no other evidence to support their contention that the Defendants’ award of 164 days extension
of time was improper, I had no basis to find that the Delay Certificates were in any way invalid. If the Plaintiffs had seriously
wanted to set aside these Certificates, so that they would not be subject to the imposition of liquidated damages, they should have
procured an independent expert to explain why the Defendants’ assessment and evaluation of extension of time in the various
works for the project were in error. However, they were content to merely put their case to DW-1 without any supporting evidence.
Defects and Final Certificates
80 In the Plaintiffs’ Closing Submissions, they had also sought an order to set aside the Final Certificates
[note: 14]
issued for the units 405, 407, 409 and 411 Race Course Road on 1 December 2005, 5 December 2005 and 20 January 2006 on account of
the deductions made. I note first of all that this specific claim was made after commencement of the action. In the Amended Statement
of Claim, the Plaintiffs had prayed for an “order for the Defendant to issue the Final Payment Certificates” which was
rendered unnecessary by the time the matter came up for trial as the Final Certificates had all been issued by then. Procedurally,
it is incorrect for the Plaintiffs to seek a different remedy in regard to these Final Certificates in their Closing Submissions.
Their rights to challenge these Certificates arose only after the writ was issued and a fresh action should have been commenced
and their claim properly pleaded.
81 In any case, I was of the view that the Plaintiffs had not made out their case that the deductions provided for by the
Defendants in respect of rectification of defects were wrong. As pointed out earlier, the Plaintiffs had proceeded on the mistaken
assumption that the Maintenance Period was from 23 September 2002 to 23 September 2003 and since no Schedule of Defects had been
raised under Clause 27(2) of the SIA contract, they took the position that whatever complaints of defects after 7 October 2003 was
no longer their responsibility. Since it is my finding that the Completion Certificates were validly issued according to the terms
of the contract, it followed that the Plaintiffs were obliged to comply with the Architect’s Direction to complete the outstanding
defects. Their failure to do so resulted in the deductions made by the Defendants which are reflected in the Final Certificates.
Any challenge to the quantum of these deductions cannot be made on solely on the Plaintiffs’ say-so without any supporting
evaluations by an expert.
Conclusion
82 On my findings, the Plaintiffs had failed to prove on a balance of probabilities that the Defendants had acted in breach
of their duty of care in their role as certifier under the SIA contracts entered into between the Plaintiffs and the respective owners
of 405, 407, 409 and 411 Race Course Road. Since the Plaintiffs had failed on the issue of liability, it was not necessary for
me to deal with the issue of damages. Accordingly, the Plaintiffs’ action was dismissed with costs.
[note: 1]
As stated in DW-1’s affidavit of evidence-in-chief paragraph 4 although AB-57 suggests it was the 5
th
Ed, 1998 Reprint.
[note: 2]
See AB-9. A copy of the entire SIA contract signed for unit 405 Race Course Road is at AB1 to 59. The contracts for the other 3
units are on similar terms.
[note: 3]
This was in O. S. 69 of 2006, the application being made pursuant to section 54A Subordinate Courts Act (Cap. 321)
[note: 4]
In Civil Appeal 85/1999
[note: 5]
Viz.
in a building contract where the architect performs the duty of administering the contract and supervising the building works as
agent for the employer as well as that of certification where he acts on his own professional skill and judgment.
[note: 6]
As set out in paragraphs 191 to 193 of
[note: 7]
Per Lord Fraser of Tullybelton at 533 of [1983] 1 AC
[note: 8]
See in particular paragraph 34 at
[note: 9]
This should refer to Final Certificate as there is no Final
Payment
Certificate provided for in the SIA Conditions of Contract.
[note: 10]
As required by Clause 24(4)
[note: 11]
See
AB-188 for Maintenance Certificate for unit 405
[note: 12]
See AB-73 to 75, AB-200 to 201, AB 292, AB-390 to 391
[note: 13]
See NE page 129 to 133
[note: 14]
See AB-189 for unit 405, AB-127 for unit 407, DB-5 for unit 409 and AB-483 unit 411
[1982] UKHL 4; [1983] 1 AC 520
contract
by Defendants
be completed
] [Hide Context]
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