Allan Kinsey & Anor v Sunway Rahman Putra Sdn Bhd & Anor; Dekon Sdn Bhd (Third Party)

Transcription

1 Allan Kinsey & Anor v Sunway Rahman Putra Sdn Bhd & Anor; Dekon Sdn Bhd (Third Party) HIGH COURT, SHAH ALAM SUIT NO: 22(NCVC) PRASAD SANDOSHAM ABRAHAM J 16 APRIL 2015 [2016] 1 CIDB-CLR 72 The Plaintiffs purchased a bungalow ( the property ) built by the First Defendant. Prior to the Plaintiffs taking delivery of vacant possession of the property from the First Defendant, the Plaintiffs at a joint inspection with the First Defendant s representative, noticed and highlighted patent defects of the said property. In early 2006, the Plaintiffs discovered cracks in the bungalow and informed the First Defendant. The First Defendant arranged for the Second Defendant to do a site inspection. The Second Defendant prepared a report wherein the cracks were attributed, inter alia, to: poor workmanship, construction errors and movement of the reinforced concrete retaining wall ("RCRW") thereby causing subsidence of the ground at the affected areas. The cracks were repaired but they subsequently recurred. In March 2006, the Plaintiffs engaged a contractor to build an extension to their bungalow. New cracks developed. The Plaintiffs sued: (i) the First Defendant for breach of cl 14 of the principal agreement, to build the property in a good and workman like manner; and (ii) the Second Defendant for negligence in his roles, duties and responsibilities to the First Defendant. Held, dismissing the Plaintiffs claim: (1) The issue of the certificate of fitness of occupation points to compliance and satisfaction with cl. 14 ie, that the said property had been constructed in a good and workman manner in accordance with the description set out in the fourth schedule of the principal agreement and in accordance with plans approved. (2) The Plaintiffs expert reports whilst dealing with the issue of cracks, did not focus on the First Defendant s obligations under cl. 14. Whilst the findings might be relevant in support of a plea for breach of duty, since the Plaintiffs rely by way of their pleadings on a breach of cl. 14 of the principal agreement, the report was of little assistance to the Plaintiffs. The First Defendant had complied with its contractual obligations under cl. 14 of the principal agreement. (3) Although the Plaintiffs had raised a plea of implied terms to be read into the principal agreement, they had failed to expressly plead particulars of the implied terms they were relying on. 72

2 Allan Kinsey & Anor v Sunway Rahman Putra Sdn Bhd & Allan Kinsey & Anor v Sunway Rahman Putra Sdn Bhd & Anor; Dekon Sdn Bhd (Third Party) (4) If in the instant case, the officious bystander were to be asked whether terms ought to be implied in the principal agreement, the answer would be that so long as the property was built according to the building plans and specifications set out in the principal agreement and the certificate of fitness for occupation had been issued, there would be no need to imply terms into the principal agreement. (5) A plea of implied terms cannot be sustained in a statutory sale and purchase agreement. In the instant case, the certificate of practical completion had been issued which implied compliance with cl. 14 of the principal agreement. It followed that a plea for breach of the principal agreement could not be sustained. (6) The fact whether or not the Second Defendant had been negligent in his role, duties and responsibilities to the First Defendant had no bearing to the Plaintiffs claim as no duty of care was owed by the Second Defendant in that regard. As to the Second Defendant s role as structural engineer to the Plaintiffs for the extension, the relief sought was an indemnity against any contribution ordered by the Court in respect of execution of works associated with the extension. Since the Court had dismissed the Plaintiffs claim against both Defendants, no question of indemnity would arise in respect of contribution and the Plaintiffs claim against the Second Defendant as pleaded should stand dismissed. COMMENTARY by Wilfred Abraham Advocate & Solicitor (High Court of Malaya) Partner, Head of the Arbitration & Alternative Dispute Resolution Practice Group at Zul Rafique & Partners Pleadings and Their Importance Introduction The Plaintiffs case against the First Defendant is based on a breach of clause 14 of the agreement (the standard sale and purchase agreement). Further, the Plaintiffs sued the Second Defendant (the structural engineer) for breach of duty. The judgment is centered mainly in the manner the Plaintiffs case is pleaded, i.e. there was a breach of the Defendants duty pursuant to clause 14. The judgment at paragraph 31, which is set out, takes the 73

3 view that compliance with clause 14 by the First Defendant and an issuance of the Certificate of Fitness by the authorities are indicative that the building was completed as required under clauses 14 and 25 of the agreement. See paragraphs 31 and 33 of the judgment below. "[31] The issue of the certificate of fitness of occupation will point compliance and satisfaction of cl. 14 ie, that the said property had been constructed in a good and workman manner in accordance with the description set out in the fourth schedule of the principal agreement and in accordance with plan approved. And I refer to the case of Pentadel Sdn Bhd v. TPPT Sdn Bhd [2011] 1 LNS 1283, wherein Her Ladyship Hadhariah found at p. 6 of her judgment and I quote with approval: "Under a construction contract, a certificate issued by the relevant authorities certifying the works had been completed is prima facie proof that that the works had been completed." [33] The court is of the view that all the evidence and documents point to the irresistible conclusion that the said property had been constructed in a good and workmanlike manner in accordance with the relevant laws and regulations. The first defendant has delivered vacant possession of the said property with inter alia the support of a certificate signed by the first defendant s architect (see p. 38 bundle B2) certifying that the said property been duly constructed and completed in accordance with all relevant acts, by-laws and regulations and that all conditions imposed by the appropriate authority in respect of the issuance of the certificate of fitness for occupation had been duly complied with". 1 Issues arising in this case and lessons learnt The issue that may be discerned from the judgment seems to be the manner in which the case was pleaded. See paragraph 26, which is set out. "[26] The plaintiffs claim against the first defendant is grounded on a breach of contract ie, a breach of cl. 14 of the principal agreement (see p. 21 of first defendant s core bundle) to build the said property in a good and workman like manner. In the amended statement of claim of the plaintiffs the particulars of breach have been set out under the principal agreement. Clause 14 of the principal agreement is set out as follows: Materials and workmanship to conform to description 74

4 Allan Kinsey & Anor v Sunway Rahman Putra Sdn Bhd & Allan Kinsey & Anor v Sunway Rahman Putra Sdn Bhd & Anor; Dekon Sdn Bhd (Third Party) 14. The said Building shall be constructed in a good and workmanlike manner in accordance with the description set out in the Fourth Schedule hereto and in accordance with the plans approved by the Appropriate Authority as in the Schedule, which descriptions and plans have been accepted and approved by the Purchaser, as the Purchaser hereby acknowledges. No changes thereto or deviations therefrom shall be made without the consent in writing of the Purchaser except such as may be required by the Appropriate Authority. The Purchaser shall not be liable for the cost of such changes or deviations and in the event that the changes or deviations involve the substitution or use of cheaper materials or the omission of works originally agreed to be carried out by the Vendor the Purchaser shall be entitled to a corresponding reduction in the purchase price herein or to damages, as the case may be. (emphasis added)". 2 The Plaintiff could have pleaded the doctrine of Res Ipsa and the facts acknowledged that the damage occurred but there has been no challenge of the cause of it, at least from the facts set out in the judgment. Clauses 14 and 21 seem to be merely regulatory and required for compliance for authority approval. It does not extend to when dealing with patent defects. These issues do not seem to have been dealt in the judgment. The fact that the decision states that in the event clause 14 is complied with, it is sufficient to absolve the developer, is also not quite agreeable. Furthermore, the fact that the wall is damaged and why it was so, must be considered when deciding the cause and effect. However, this decision highlights the importance of pleadings and the importance of stressing the crucial issues in this case what is "good workmanlike manner". The judgment only deals with this issue from a statutory position. However, this may be due to what was pleaded in this case. The second issue in the case is the action against the structural engineer. The structural engineer does not owe a duty of care to the Plaintiffs. That would be a correct position in contract and there is no duty in tort. See paragraph 40 and those sentences underlined. "[40] From the statement of claim, the crux of the plea against the second defendant is to be found in para. 5.1 of the statement of claim (see p. 42 of bundle A1) and the particulars of negligence have been set out. The fact whether or not the second defendant has been negligent in his role, duties and responsibilities to the first defendant have no bearing to the plaintiffs claim as no duty of care 75

5 is owed by the second defendant in that regard. As to the second defendant s role as structural engineer to the plaintiffs for the extension, the relief sought is an indemnity against any contribution ordered by this court in respect of execution of works associated with the extension. Since this court has dismissed the plaintiffs claim against both defendants, no question of indemnity arises in respect of contribution and the plaintiffs claim against the second defendant as pleaded should stand dismissed (see p. 46 of bundle A1)." 3 Again, it is a question of pleading and choosing the proper parties to bring an action against. The action against the structural engineer could not be sustained as there was no duty owed to the Plaintiffs either in contract or tort by the Second Defendant. Suggested best practices to be adopted The entire case revolved around the pleadings in the above case. The Court has to be bound by the relevant pleadings in each case. It is suggested pleadings should include all plausible avenues of claim in order to properly ventilate all relevant issues and enable the Courts to make a ruling on these issues. 1. [2015] 4 CLJ 624 at Ibid at Ibid at