| RSP Architects Planners & Engineers (Raglan Squire & Partners FE) v Management Corporation Strata Title Plan No 1075 and Another [1999] 2 SLR 449; [1999] SGCA 30 |
| CA 246/1998 | |
| 30 Apr 1999 | |
| Court of Appeal | |
| Karthigesu JA, L P Thean JA, Yong Pung How CJ | |
| Wong Meng Meng SC, Mohan R Pillay and Lawrence Tan (Wong Partnership) for the appellants, Woo Bih Li SC and Rodney Keong (Bih Li & Lee) for the first respondent, Philip Jeyaretnam and Samuel Lee (Helen Yeo & Partners) for the second respondent |
Judgment
[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.] LP Thean JA (delivering the grounds of judgment of the court): 1 This appeal arose from an action instituted by the first respondents, the Management Corporation Strata Title Plan No 1075 (“MCST”), against the appellants, RSP Architects Planners & Engineers (Raglan Squire & Partners FE) (“RSP”), claiming damages for negligence in the design and supervision of the construction of a condominium called Eastern Lagoon II situate at East Coast Road. RSP while denying liability took out third party proceedings against the second respondents, Engineering Construction (Pte) Ltd (“EC”), who were the main contractors of the condominium, claiming against them an indemnity or contribution. The action was heard before Judith Prakash J. She allowed the claim of MCST against RSP and dismissed RSP’s claim against EC. Against her decision RSP appealed. We dismissed the appeal and now give our reasons. Facts 2 The Eastern Lagoon II and another condominium called Eastern Lagoon I, are two separate developments forming the Eastern Lagoon condominium which was developed by the developers, Eastern Lagoon Pte Ltd. The developers appointed RSP as the architects and engineers and EC as the main contractors for the development. 3 The Eastern Lagoon II condominium comprises two separate 19-storey apartment blocks, the Virgo and Gemini blocks. Flanking each side of the Virgo block is a three-storey block of walk-up apartments, maisonettes and townhouses, known as the Taurus and Capricorn blocks. Similarly the Gemini block is flanked on either side by three-storey blocks, named Libra and Aquarius. Design of the project commenced in 1973 and was completed in 1981. Following the grant of written permission by the Development Control Division of Public Works Department (“PWD”), construction commenced in July 1982 and was completed in September 1984. The certificate of fitness for occupation was granted on 20 July 1985. MCST, the management corporation of the condominium, was constituted on 5 April 1986. 4 Some six years later, on 20 November 1992, bricks and brick tiles forming part of a gable end wall of the Gemini block fell onto unit #03-01 of the Libra block causing damage to the roof and contents of that unit. Shortly thereafter, MCST appointed M/s Murray North (SEA) Pte Ltd (“Murray North”), who are the structural engineers and chartered building surveyors, to investigate and report on the damage and potential dangers arising from this incident. 5 In May 1993, PWD having been informed of the failure of the wall claddings considered that the condition of the external walls of the two tower blocks was likely to be dangerous and issued an order dated 29 May 1993 requiring MCST, among other things, to appoint a professional engineer to inspect the condition of the walls and execute such rectification works as were necessary. The walls 6 The external walls of the high-rise blocks were constructed as follows. The skeleton of each high-rise block consisted of horizontal concrete slabs, demarcating each storey of the block. The slabs were supported by concrete pillars. Together, the vertical columns and horizontal beams constituted a reinforced concrete frame. The spaces between the columns and beams were then filled up with panels of brickwork to form what are known as “gable end walls”. Originally the brickwork panelling was designed as solid walls, but subsequently owing to a design change, the brickwork was designed as a cavity wall which was made up of an inner and an outer layers (or “leaves”) of brickwork with a cavity being present in between the two layers. To achieve a uniform external appearance, the faces of the vertical columns and horizontal beams of the reinforced concrete frame were covered with brick tiles. These brick tiles were laid over and affixed to the concrete slabs and pillars with a sand and mortar paste. In order for the external bricks to be made flush with the brick tiles, it was necessary to lay the bricks with some “overhang”, ie the laid bricks jutted out over the precipice of the concrete slab to the measurement of the thickness of the brick tiles. For our purpose, the bricks and brick tiles of the external walls are referred to as “wall claddings”. 7 The external walls and brick tiles are common property over which MCST has the management and control. The wall claddings failed at only one location, namely, the fifth storey of one of the gable end walls of Gemini block. MCST, however, carried out rectification works to all gable end walls of both the tower blocks. They also repaired the roof of unit #03-01 of Libra block and made good the damage there. The bulk of their claim was for the costs and expenses incurred in carrying out the rectification works. It was their case that although there was only one incident of falling tiles and bricks, the wall claddings had failed throughout the gable end walls and had to be repaired before any further injury or damage occurred. They asserted that the main cause of the failure was the absence of movement joints in the structure of the walls and that the failure was contributed to by the inadequacy of wall ties, the inadequate roughening of the concrete surfaces and the inadequate support of brickwork, and that these inadequacies were caused by the negligence of RSP in the design and supervision of the construction of the walls. 8 In their defence, RSP asserted that they owed no duty of care to MCST in respect of either the design or the supervision. This was because the damage sustained by MCST by reason of the failure of the claddings was purely economic loss, and RSP did not stand in such a relationship of proximity to MCST that they could be made responsible for pure economic loss. RSP’s alternative stand was that the failure of the claddings was due to bad workmanship on the part of EC, the main contractors, and that as they had supervised the works adequately they could not be made responsible for sheer bad workmanship. They said that the absence of movement joints in the claddings had nothing to do with the failure and, in any event, they were not negligent in failing to provide for such joints in the design as they had acted in accordance with local architectural practice at the time of construction in deciding that movement joints were not necessary for the tower blocks of the condominium. 9 RSP’s claim against the third party was based on their allegation that the failure of the claddings was caused or contributed to by bad workmanship for which EC were responsible. Accordingly, EC were liable to indemnify RSP against their liability, if any, to MCST. EC’s stand was that the failure was due to the absence of movement joints and not to any lapse in their workmanship and, in any event, the tiling works were carried out by independent sub-contractors for whom they have no responsibility in tort. 10 Judith Prakash J allowed the MCST’s claim against RSP and dismissed RSP’s claim against EC. First, she held that the architects owed a duty of care to the MCST to avoid the loss sustained. Secondly, she found as a fact that the architects’ design had fallen short of the requisite standard of care. Thirdly, she exonerated EC from liability, holding firstly that the architects’ design was so flawed that the quality of the construction was irrelevant, and secondly, that EC having delegated the task of constructing the walls to independent contractors could not be held liable for any failure or bad workmanship in such construction. The appeal 11 Before us, the learned trial judge’s decision was challenged on three main grounds. First, RSP, as architects, owed no duty of care to the MCST in respect of the design of the condominium insofar as purely economic loss was concerned. Secondly, it was contended that even if they owed a duty of care to the MCST, they had met the standard of care demanded of them. In other words, they claimed that their design was sound and that their supervision of the construction was adequate. Thirdly, the appellants contested the learned trial judge’s determination that no order for an indemnity or contribution should be made against EC, the third party. Duty of care 12 Although the falling bricks and brick tiles caused physical damage to the roof and contents of the unit #03-01 of the Libra block, which MCST had made good, the main expenses incurred by them were in respect of rectification of the wall claddings, which had not fallen, so as to avoid any future injury to persons and/or damage to property. These were the expenses which MCST sought to recover from RSP and they were not loss sustained in consequence of injury to person or damage to property. They were pure economic loss. The first issue in this appeal was one of law, and that was whether RSP owed a duty of care to MCST to guard against such economic loss. 13 The question whether a duty of care is owed by the developers of a condominium (as contradistinct from the architects) to the management corporation of the condominium was considered by this court at length and was decided in the affirmative in RSP Architects Planners & Engineers v Ocean Front Pte Ltd [1996] 1 SLR 113. In the instant case, the learned trial judge applied a similar line of reasoning in Ocean Front in analysing the relationship between the architects, RSP and the management corporation, MCST, and held that the architects owed a duty of care to MCST to avoid the loss sustained. She reasoned thus at para 14–15: 14 I have, therefore, as a first step, to consider the relationship between the defendants [RSP] as architects for the condominium and the plaintiffs [MCST] who as its management corporation are statutorily entrusted with the maintenance, upkeep and repair of its common property. Although the two situations are obviously not identical, many of the factors which the Court of Appeal found established a very close relationship between the developers and the management corporation in Ocean Front also exist in this case. 15 The factual situation is as follows. The decision to construct a condominium was made by the developers. They, however, brought the defendants into the project at a very early stage and it was the defendants who bore the responsibility for the design of the condominium and who also undertook to supervise its construction in accordance with the general responsibilities of architects in Singapore. It was the defendants who decided what the tower blocks should look like and chose the type of wall cladding to be used for its external walls. They undertook the obligation to design the condominium so as to ensure that it was a safe structure and were alone responsible for the design. They were involved in the project almost every step of the way up to completion of construction and issue of the certificate of fitness for occupation. They would have been aware that the developers had decided to apply for subdivision of the condominium and that accordingly each lot in the subdivided building would have a separate subsidiary strata certificate of title. They would have been aware also that the consequence of this decision was that in due course a management corporation would be formed comprising the various subsidiary strata title proprietors and that this management corporation would succeed the developers as the person responsible for the control, management and administration of the common property and having the obligations of up-keeping and maintaining the common property. The performance of the aforesaid obligations would be affected by whether there had been reasonable care in the design and supervision of the project. The defendants knew or ought to have known that if they were negligent in their design and/or supervision the resulting defects would have to be made good by the management corporation. I would add that it was obviously foreseeable by the defendants that if they were negligent in the design of the condominium, this could result in expensive rectification work and therefore economic loss for either or both the subsidiary proprietors and the management corporation. She then concluded at para 16: 16 I consider that the factors which I have enumerated above do result in a sufficient proximity in the relationship between the defendants as architects of a condominium and the plaintiffs as the management corporation of that condominium so as to give rise to a duty on the part of the defendants to the plaintiffs to exercise reasonable care in the design and supervision of the construction of the common property so as to guard against the plaintiffs sustaining the damage complained of in this case, ie rectification of defects caused by negligent design and/or supervision. Although the relationship is not as close as that of the developers and the management corporation, it is sufficiently close in my judgment for the requirements of proximity to be satisfied and the duty of care to be imposed. 14 Having found that there was sufficient proximity in the relationship between MCST and RSP and following the approach adopted by this Court in Ocean Front, she went on to consider whether there was any good reason of public policy to avoid the imposition of such a duty on the architect and came to the conclusion that there was none. She said at para 17: [T]he amount recoverable is determinate, the class of persons is definable and the time span is not indeterminate because of the provisions of the Limitation Act (Cap 163). As for the second question relating to the objection that recovery for economic loss would result in an indefinitely transmissible warranty, this is not applicable since, under the scheme of the relevant legislation, until termination of the strata subdivision plan, the management corporation will always be the person having responsibility for the common property. RSP’s contention on the duty of care 15 RSP put at the forefront of their case the contention that Ocean Front was wrongly decided and should now be overruled. In support, their counsel advanced three arguments. His first argument was that this court in arriving at that decision was wrong in following the decision of the House of Lords in Junior Books Ltd v Veitchi Ltd Two-stage test 16 Counsel’s first argument was twofold. First, Junior Books, though not expressly overruled by the House of Lords in their subsequent decision in D & F Estates Ltd v Church Commissioners for England 17 In order to deal with this argument in full and in the proper perspective it is necessary to traverse again some of the grounds which were considered and dealt with in Ocean Front. We examine first what precisely was said by Lord Wilberforce in laying down the two-stage test in Anns, and secondly whether the test was applied in Ocean Front. The facts in that case have been sufficiently stated in Ocean Front and it is unnecessary to repeat them. Suffice here to set out what Lord Wilberforce said with reference to the two-stage test at pp 751–752: Through the trilogy of cases in this House — Donoghue v Stevenson 18 It seems to us that what is objectionable in that passage is firstly his Lordship’s sweeping proposition of a single general rule or principle which can be applied in every situation to determine whether a duty of care arises and secondly the fact that the test propounded by his Lordship in the first stage was based on foreseeability of damage alone. In Governors of the Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd There has been a tendency in some recent cases to treat these passages as being themselves of a definitive character. This is a temptation which should be resisted. The true question in each case is whether the particular defendant owed to the particular plaintiff a duty of care having the scope which is contended for, and whether he was in breach of that duty with consequent loss to the plaintiff. A relationship of proximity in Lord Atkin’s sense must exist before any duty of care can arise, but the scope of the duty must depend on all the circumstances of the case. In the subsequent case of Yuen Kun Yeu v A-G of Hong Kong Their Lordships venture to think that the two-stage test formulated by Lord Wilberforce for determining the existence of a duty of care in negligence has been elevated to a degree of importance greater than it merits, and greater perhaps than its author intended. Further, the expression of the first stage of the test carries with it a risk of misinterpretation. As Gibbs CJ pointed out in Council of the Shire of Sutherland v Heyman 59 ALJR 564, 570, there are two possible views of what Lord Wilberforce meant. The first view, favoured in a number of cases mentioned by Gibbs CJ, is that he meant to test the sufficiency of proximity simply by the reasonable contemplation of likely harm. The second view, favoured by Gibbs CJ himself, is that Lord Wilberforce meant the expression ‘proximity or neighbourhood’ to be a composite one, importing the whole concept of necessary relationship between plaintiff and defendant described by Lord Atkin in Donoghue v Stevenson 19 Similar observation was made by Lord Bridge of Harwich in Caparo Industries plc v Dickman & Ors (supra) at pp 617–618: But since the Anns case a series of decisions of the Privy Council and of your Lordships’ House, notably in judgments and speeches delivered by Lord Keith of Kinkel, have emphasised the inability of any single general principle to provide a practical test which can be applied to every situation to determine whether a duty of care is owed and, if so, what is its scope: see Governors of Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd Hence, the criticisms directed at Lord Wilberforce’s two-stage test were firstly, that a single general principle cannot be applied in determining the duty of care and its scope and secondly, that the test at the first stage confined the determinant of the existence of a duty of care and its scope to foreseeability of damage alone. 20 Anns was followed by the House of Lords in Junior Books. There, the plaintiffs engaged contractors to construct a factory for them. The contractors, being required to lay special flooring to the plaintiffs’ specifications, delegated that task to the defendants, who were specialist flooring contractors. The flooring as laid by the subcontractors was defective and cracked, and the plaintiffs incurred expenses and carried out the rectification works. They claimed the cost of relaying the floor and other items of loss, such as the cost of removing the machinery and the loss of profits while the floor was being relaid. The House of Lords, by a majority with Lord Brandon of Oakbrook dissenting, held that the plaintiffs were entitled to recover the expenses from the subcontractors. Lord Fraser of Tullybelton who delivered the first speech of the majority said at p 533: The proximity between the parties is extremely close, falling only just short of a direct contractual relationship. The injury to the respondents was a direct and foreseeable result of negligence by the appellants. The respondents, or their architects, nominated the appellants as specialist sub-contractors and they must therefore have relied upon their skill and knowledge. It would surely be wrong to exclude from probation a claim which is so strongly based, merely because of anxiety about the possible effect of the decision upon other cases where the proximity may be less strong. If and when such other cases arise they will have to be decided by applying sound principles to their particular facts. The present case seems to me to fall well within limits already recognised in principle for this type of claim, and I would decide this appeal strictly on its own facts. I rely particularly on the very close proximity between the parties which in my view distinguishes this case from the case of producers of goods to be offered for sale to the public. Lord Keith of Kinkel also delivered a speech of the majority and he said at p 535: There undoubtedly existed between the appellants [the subcontractors] and the respondents [the plaintiffs] such proximity of relationship, within the well known principle of Donoghue v Stevenson So in the present case I am of the opinion that the appellants in the laying of the floor owed to the respondents a duty to take reasonable care to avoid acts or missions which they ought to have known would be likely to cause the respondents, not only physical damage to person or property, but also pure economic loss. Economic loss would be caused to the respondents if the condition of the floor, in the course of its normal life, came to be such as to prevent the respondents from carrying out ordinary production processes on it, or, short of that, to cause the production process to be more costly than it would otherwise have been. In that situation the respondents would have been entitled to recover from the appellants expenditure incurred in relaying the floor so as to avert or mitigate their loss. Lord Roskill, who delivered the main speech of the majority, after referring to the passage of Lord Wilberforce’s speech in Anns (which we have quoted) said at p 542: Applying those statements of general principles as your Lordships have been enjoined to do both by Lord Reid and by Lord Wilberforce rather than to ask whether the particular situation which has arisen does or does not resemble some earlier and different situation where a duty of care has been held or has not been held to exist, I look for the reasons why, it being conceded that the appellants owed a duty of care to others not to construct the flooring so that those others were in peril of suffering loss or damage to their persons or their property, that duty of care should not be equally owed to the respondents. Lord Roskill then proceeded to apply the two-stage test and said at p 545: The first is ‘sufficient relationship of proximity,’ the second any considerations negativing, reducing or limiting the scope of the duty or the class of person to whom it is owed or the damages to which a breach of the duty may give rise. My Lords, it is I think in the application of those two principles that the ability to control the extent of liability in delict or in negligence lies. and having referred to two New Zealand cases and Dutton v Bognor Regis Urban District Council Turning back to the present appeal I therefore ask first whether there was the requisite degree of proximity so as to give rise to the relevant duty of care relied on by the respondents. I regard the following facts as of crucial importance in requiring an affirmative answer to that question. (1) The appellants were nominated sub-contractors. (2) The appellants were specialists in flooring. (3) The appellants knew what products were required by the respondents and their main contractors and specialised in the production of those products. (4) The appellants alone were responsible for the composition and construction of the flooring. (5) The respondents relied upon the appellants’ skill and experience. (6) The appellants as nominated sub-contractors must have known that the respondents relied upon their skill and experience. (7) The relationship between the parties was as close as it could be short of actual privity of contract. (8) The appellants must be taken to have known that if they did the work negligently (as it must be assumed that they did) the resulting defects would at some time require remedying by the respondents expending money upon the remedial measures as a consequence of which the respondents would suffer financial or economic loss. Turning to the second test, his Lordship found nothing whatsoever to restrict or preclude the duty of care from arising. It is significant to observe that, notwithstanding that he followed the two-stage test in Anns, Lord Roskill did not premise the first test on foreseeability of damage alone to found the duty of care. 21 The House of Lords retreated from this broad statement on the recoverability of economic loss in claims for defective building in the subsequent case of D & F Estates Ltd v Church Commissioners for England (supra). A differently constituted House from that which heard Junior Books rejected the plaintiffs’ claim for pure economic loss. There, the first defendants owned a piece of land, and engaged the third defendants as the main contractors in the construction of a block of flats. The plaster work was performed by the third defendants’ subcontractors. The first defendants then granted a lease of the flat to the first plaintiffs, who allowed the second and third plaintiffs to occupy the flat. It was then discovered that some of the plaster having been incorrectly applied by the sub-contractors had become loose, and in consequence fell off. The plaintiffs brought an action seeking to recover not only the cost of remedial work but also the cost of cleaning carpets and other possessions damaged by the falling plaster, loss of rent during the carrying out of the works, and damages for disturbance to the second and third plaintiffs. The House of Lords held that the plaintiffs were not entitled to recover. Lord Bridge of Harwich who delivered one of the main speeches of the House said at p 207: It seems to me clear that the cost of replacing the defective plaster itself, either as carried out in 1980 or as intended to be carried out in future, was not an item of damage for which the builder of Chelwood House could possible be made liable in negligence under the principle of Donoghue v Stevenson or any legitimate development of that principle. To make him so liable would be to impose upon him for the benefit of those with whom he had no contractual relationship the obligation of one who warranted the quality of the plaster as regards materials, workmanship and fitness for purpose. Lord Oliver of Aylmerton delivered the other main speech of the House and he said at pp 213–214: A cause of action in negligence at common law which arises only when the sole damage is the mere existence of the defect giving rise to the possibility of damage in the future, which crystallizes only when that damage is imminent, and the damages for which are measured, not by the full amount of the loss attributable to the defect but by the cost of remedying it only to the extent necessary to avert a risk of physical injury, is a novel concept. 22 About one year later came Murphy v Brentwood District Council (supra), which RSP urged us to adopt. It was a decision of a specially constituted panel of seven Law Lords which expressly overruled Dutton and Anns and specifically approved the Australian High Court’s decision in The Council of the Shire of Sutherland v Heyman (supra). There, the plaintiff purchased a pair of semidetached houses constructed on a foundation approved by the local council’s consulting engineer. The foundation proved faulty and serious cracks appeared in the house. Unable to repair the house at the cost of £45,000, the plaintiff sold the house with the defects unremedied at £35,000 below what its market value would otherwise have been. He claimed against the council damages, alleging that his family had been subjected to an imminent risk to health and safety because gas and soil pipes had broken and there was a risk of further breaks. The House of Lords departed from Anns and held that the scope of the duty of care of the council did not extend to the kind of economic loss sustained by the plaintiff. Lord Keith of Kinkel in holding that the damage in Anns was purely economic loss said at p 468: It being recognised that the nature of the loss held to be recoverable in Anns was pure economic loss, the next point for examination is whether the avoidance of loss of that nature fell within the scope of any duty of care owed to the plaintiffs by the local authority. On the basis of the law as it stood at the time of the decision the answer to that question must be in the negative. The right to recover for pure economic loss, not flowing from physical injury, did not then extend beyond the situation where the loss had been sustained through reliance on negligent misstatements, as in Hedley Byrne. Lord Bridge said at p 480: All these considerations lead inevitably to the conclusion that a building owner can only recover the cost of repairing a defective building on the ground of the authority’s negligence in performing its statutory function of approving plans or inspecting buildings in the course of construction if the scope of the authority’s duty of care is wide enough to embrace purely economic loss. The House has already held in D & F Estates that a builder, in the absence of any contractual duty or of a special relationship of proximity introducing the Hedley Byrne principle of reliance, owes no duty of care in tort in respect of the quality of his work. As I pointed out in D & F Estates, to hold that the builder owed such a duty of care to any person acquiring an interest in the product of the builder’s work would be to impose upon him the obligations of an indefinitely transmissible warranty of quality. Lord Oliver said at pp 485–486: The critical question, as was pointed out in the analysis of Brennan J in his judgment in Council of the Shire of Sutherland v Heyman 157 CLR 424, is not the nature of the damage in itself, whether physical or pecuniary, but whether the scope of the duty of care in the circumstances of the case is such as to embrace damage of the kind which the plaintiff claims to have sustained: see Caparo Industries plc v Dickman 23 Before we revert to Ocean Front it is necessary to revisit Bryan v Maloney (supra) which was relied in Ocean Front. As it was suggested by counsel for RSP that this court’s decision in Ocean Front was somewhat inconsistent with the approach in Bryan v Maloney it is necessary to deal with the latter in some detail. There, Mr Bryan, a builder, built a house for one Mrs Manion who sold it to a couple, Mr and Mrs Quittenden, who later in turn sold it to Mrs Maloney. About six months after the purchase, cracks began to appear in the walls of the house and the damage to the fabric of the house became apparent and was extensive. It was found that the reasons for the cracks and other damage was that the house had been built on inadequate footings. Mrs Maloney sued Mr Bryan in negligence for pure economic loss, ie the amount which would necessarily be expended in remedying the inadequate footings and damage to the fabric of the house. She succeeded at first instance and on appeal the Full Court of the Supreme Court of Tasmania dismissed the appeal. Mr Bryan then appealed to the High Court which, by a majority, dismissed the appeal. In a joint judgment, Mason CJ, Deane and Gaudron JJ held that there was a relationship of proximity between Mr Bryan and Mrs Maloney which gave rise to a duty of care on the part of Mr Bryan to avoid the kind of damage suffered by Mrs Maloney. Their Honours opined that a relationship of proximity existed between Mr Bryan and persons other than the original owner, including Mrs Maloney, who might suffer personal injury or damage to property as a consequence of a collapse of the house on account of inadequate footing. In that context, the relationship between Mr Bryan and Mrs Maloney was examined and their Honours said at p 171: [T]he relationship between them [Mr Bryan and Mrs Maloney] is marked by proximity in a number of important respects. The connecting link of the house is itself a substantial one. It is a permanent structure to be used indefinitely and, in this country, is likely to represent one of the most significant, and possible the most significant, investment which the subsequent owner will make during his or her lifetime. It is obviously foreseeable by such a builder that the negligent construction of the house with inadequate footings is likely to cause economic loss, of the kind sustained by Mrs Maloney, to the owner of the house at the time when the inadequacy of the footings first becomes manifest. They went on and held that upon analysis the relationship between Mr Bryan and Mrs Maloney was marked by “the kind of assumption of responsibility and known reliance” commonly present ‘in the categories of cases in which a relationship of proximity exists with respect to pure economic loss’. They said at p 172: In ordinary circumstances, the builder of a house undertakes the responsibility of erecting a structure on the basis that its footings are adequate to support it for a period during which it is likely that there will be one or more subsequent owners. Such a subsequent owner will ordinarily have no greater, and will often have less, opportunity to inspect and test the footings of the house than the first owner. Such a subsequent owner is likely to be unskilled in building matters and inexperienced in the niceties of real property investment. Any builder should be aware that such a subsequent owner will be likely, if inadequacy of the footings has not become manifest, to assume that the house has been competently built and that the footings are in fact adequate. 24 The learned Chief Justice and his brother judges then compared the relationship between the builder and the first owner with that between the builder and the subsequent owner as regards the particular kind of economic loss sustained by Mrs Maloney and said at p 172: [F]rom the point of view of proximity, the similarities between the relationship between builder and first owner and the relationship between builder and subsequent owner as regards the particular kind of economic loss are of much greater significance than the differences to which attention has been drawn, namely, the absence of direct contact or dealing and the possibly extended time in which liability might arise. Both relationships are characterized, to a comparable extent, by assumption of responsibility on the part of the builder and likely reliance on the part of the owner. No distinction can be drawn between the two relationships in so far as the foreseeability of the particular kind of economic loss is concerned: it is obviously foreseeable that that loss will be sustained by whichever of the first or subsequent owners happens to be the owner at the time when the inadequacy of the footings becomes manifest. and held (at p 173) that in all the circumstances, the relationship between builder and subsequent owner as regards the particular kind of economic loss should be accepted as possessing comparable degree of proximity to that possessed by the relationship between the builder and the first owner and as giving rise to the duty to take reasonable care on the part of the builder to avoid such loss. Their Honours found further support for such relationship of proximity at p 173: The conclusion that a relationship of proximity existed between Mr Bryan, as the builder, and Mrs Maloney, as subsequent owner, with respect to the particular kind of economic loss is also supported by analogy with the relationship which would have existed between Mr Bryan, as the builder, and any person who suffered physical injury to person or property in the event that the house or part of the house had collapsed at the time when the inadequacy of the foundations first became manifest. It is difficult to see why, as a matter of principle, policy or common sense, a negligent builder should be liable for ordinary physical injury caused to any person or to other property by reason of the collapse of a building by reason of the inadequacy of the foundations but be not liable to the owner of the building for the cost of remedial work necessary to remedy that inadequacy and to avert such damage. 25 In coming to the decision that there was sufficient degree of proximity in the relationship between Mr Bryan and Mrs Maloney, Mason CJ, Deane and Gaudron JJ also considered whether there was any factor or any policy considerations which precluded the recognition of such relationship and said at p 171: The only factor which arguably precludes the recognition of a relevant relationship of proximity between builder and subsequent owner for the purposes of the present case is the kind of damage involved, namely, mere economic loss. As has been seen, a relevant relationship of proximity would have existed between the builder and Mrs Maloney with respect to ordinary physical injury to her person or other property caused by a partial collapse of the house due to its inadequate footings even if she had not been the owner. Here again, it is important to bear in mind the particular kind of economic loss involved. As has been said, the distinction between that kind of economic loss and ordinary physical damage to property is an essentially technical one. Indeed, the economic loss sustained by the owner of a house by reason of diminution in value when the inadequacy of the footings first becomes manifest by consequent damage to the fabric of the house is, at least arguably, less remote and more readily foreseeable than ordinary physical damage to other property of the owner which might be caused by an actual collapse of part of the house as a result of the inadequacy of those footings. Again, the policy considerations underlying the reluctance of the courts to recognise a relationship of proximity and a consequential duty of care in cases of mere economic loss are largely inapplicable to the relationship between builder and subsequent owner as regards that particular kind of economic loss. There can be no question of inconsistency with the builder’s legitimate pursuit of his or her own financial interests since, as has been seen, the builder owed a duty of care to the first owner with respect to such loss. 26 We now turn to Ocean Front. In that case, the management corporation brought an action against the developers for expenses incurred in making good the common property which was occasioned by bad workmanship in the construction of the condominium, and the developers brought third party proceedings against the architects and the main contractors of the condominium. Among other things, a point of law was raised as a preliminary issue, namely: whether the developers owed a duty of care to the management corporation to avoid causing such economic loss and the answer to this question was decided in the affirmative. In coming to this conclusion this court considered the relevant authorities in England, Australia, New Zealand and also a Canadian authority, and opined (at p 138) that there is no single rule or set of rules for determining, first, whether a duty of care arises in particular circumstances and the scope of that duty, and, second, that in determining the existence of a duty of care and scope of such duty all the relevant circumstances would have to be examined. This court said at p 139: But the approach of the court has been to examine a particular circumstance to determine whether there exists that degree of proximity between the plaintiff and the defendant as would give rise to a duty of care by the latter to the former with respect to the damage sustained by the former. Such proximity is the ‘determinant’ of the duty of care and also the scope of such duty. In Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520, at pp 542–543, in a joint judgment, Mason CJ, Deane, Dawson, Tookey and Gaudron JJ said: The “general conception” of a relationship of proximity was identified (Donoghue v Stevenson 27 With this in mind the court turned to consider and examine the facts before it (at pp 140–141) and came to the following conclusion at pp 141–142: Bearing all these considerations in mind, if we may respectfully adopt the methodology and the words used by Lord Roskill in Junior Books (supra at p 546), we regard the following facts of crucial importance in determining that there is sufficient proximity between the developers and the management corporation which gives rise to the duty of care: (i) the management corporation was an entity conceived and created by the developers; (ii) the developers were the party who built and developed the condominium including the common property and undertook the obligations to construct it in good and workmanlike manner and were alone responsible for such construction; (iii) after completion of the condominium the developers were the party solely responsible for the maintenance and upkeep of the common property; (iv) the management corporation as the successor of the developers took over the control, management and administration of the common property and has the obligations of upkeeping and maintaining the common property; (v) the performance of these obligations is very much dependent on the developers having exercised reasonable care in the construction of the common property; (vi) the developers obviously knew or ought to have known that if they were negligent in their construction of the common property the resulting defects would have to be made good by the management corporation. The relationship between the developers and management corporation is as close it could be short of actual privity of contract. In our judgment, there is a duty on the part of the developers in the construction of the common property a duty to take reasonable care to avoid the kind of damage sustained by the management corporation. 28 Having found that there was sufficient degree of proximity giving rise to the duty of care on the part of the developers, the court then proceeded to consider whether there was any policy consideration negativing such duty. The court said at p 142: We now turn to consider whether there is any policy consideration in negativing such duty of care. First, there is the question whether this would result in imposing liability ‘in an indeterminate amount for an indeterminate time to an indeterminate class’. The amount recoverable is the cost of repair and making good the defects in the common property and in no way can it be said to be indeterminate. The class of persons is finite and definable. As for the duration, the time span is also not indeterminate, as the maximum period of time in which the developers can possibly be exposed to liability is limited by the Limitation Act (Cap 163): see s 24B. Secondly, there is also a related objection that recovery for economic loss would result in an indefinitely transmissible warranty. The common property has been and will continue to remain in the control and under the management of the management corporation. There is no question of any transmissible warranty to any other party. 29 It is abundantly clear that in Ocean Front this court did not follow the broad proposition laid down by Lord Wilberforce in Anns. True, the court reached its conclusion by a two-stage process. In principle, there is no objection to such approach. It depends on what is involved and considered in each stage. The court certainly did not apply the first test in Anns. The court’s finding that there was sufficient degree of proximity giving rise to a duty on the part of the developers to avoid the loss sustained by the management corporation was not premised on foreseeability of damage alone, but on the consideration of other relevant facts. Nor did the court accept Lord Wilberforce’s proposition that in any given situation a single general rule or principle can be applied to determine whether a duty of care arises. 30 It does not follow from the mere fact that the court in the course of their determination examined the facts by the two-stage process that the court in effect followed Anns. In the Australian case of The Council of the Shire of Sutherland v Heyman (1984-85) 157 CLR 424, which rejected Anns, Gibbs CJ said at p 441: In deciding whether the necessary relationship exists, and the scope of the duty which it creates, it is necessary for the court to examine closely all the circumstances that throw light on the nature of the relationship between the parties. The judgment of Lord Roskill in Junior Books Ltd v Veitchi Ltd 31 Similarly, in Bryan v Maloney (supra) Mason CJ, Deane and Gaudron JJ in determining the existence of the relevant duty of care also proceeded by a twostage process. Their Honours arrived at the conclusion that there was a relationship of proximity between Mr Bryan and Mrs Maloney giving rise to the duty of care on the part of Mr Bryan to avoid the kind of loss sustained by Mrs Maloney in the following manner. They considered the relevant facts and the connections between the parties and on the basis of their consideration determined that there was sufficient degree of proximity in that relationship giving rise to such duty of care. Having found that, they then considered whether there were factors or policy considerations which precluded the recognition of such relationship of proximity and arrived at the conclusion there were none. The approach this court adopted in Ocean Front was the same as that, or at least was not inconsistent with that, adopted in Bryan v Maloney. Stripped of the verbiage, the crux of such approach is no more than this: the court first examines and considers the facts and factors to determine whether there is sufficient degree of proximity in the relationship between the party who has sustained the loss and the party who is said to have caused the loss which would give rise to a duty of care on the part of the latter to avoid the kind of loss sustained by the former. This court in Ocean Front said at p 139: … the approach of the court has been to examine a particular circumstance to determine whether there exists that degree of proximity between the plaintiff and the defendant as would give rise to a duty of care by the latter to the former with respect to the damage sustained by the former. Such proximity is the ‘determinant’ of the duty of care and also the scope of such duty. Next, having found such degree of proximity, the court next considers whether there is any material factor or policy which precludes such duty from arising. Both on principle and on authority, we do not see why such an approach should not be taken in Ocean Front and in a case such as the one before us. 32 In coming to the conclusion as the court did in Ocean Front, the court declined to follow the decisions of the House of Lords in D & F Estates and Murphy. In this case, we have not been persuaded not to depart from these authorities. The element of reliance 33 We now turn to the second argument advanced on behalf of RSP. It was argued before us that this court fell into error in applying Junior Books in that there was absent in Ocean Front the element of “reliance” which was crucial to the imposition of a duty in Junior Books. It was suggested that this court considered only the foreseeability of damage in determining the issue of proximity. In support, counsel relied on the following passage of the judgment at p 140: … the management corporation was in fact the creation of the developers. Historically there existed a very close proximity in relationship between the developers and the management corporation. It was therefore clearly foreseeable by the developers that if in the construction of the common property they failed to exercise reasonable care and skill, the burden of making good any defects arising from their failure would inevitably rebound on their successor, the management corporation. 34 We were unable to accept this argument. Counsel, in our view, read this passage out of the proper context. The element of foreseeability was only one of the several ingredients the court took into account. True it is that the court did not use the word “reliance”, but there were present there the very close relationship between the parties and the elements of “assumption of responsibility” and “known reliance” in the sense stated in Bryan v Maloney. In discussing the relationship between the parties this court said, at p 141: (ii) the developers were the party who built and developed the condominium including the common property and undertook the obligations to construct it in a good and workmanlike manner and were alone responsible for such construction; (iii) after completion of the condominium the developers were the party solely responsible for the maintenance and upkeep of the common property; (iv) the management corporation as the successor of the developers took over the control, management and administration of the common property and has the obligations of upkeeping and maintaining the common property; (v) the performance of these obligations is very much dependent on the developers having exercised reasonable care in the construction of the common property; (vi) the developers obviously knew or ought to have known that if they were negligent in their construction of the common property the resulting defects would have to be made good by the management corporation. Quite clearly, therefore, the court took the view that the developers assumed the responsibility of constructing the common property with reasonable care and skill and that the developers knew that the management corporation being their successor depended (or relied) on their competence in the construction. Caparo 35 We now come to the third argument of counsel. It was contended that assuming Ocean Front was rightly decided, it should be read in conjunction with Caparo Industries plc v Dickman 36 In Caparo, the plaintiffs were a public limited company which had taken over another public limited company, Fidelity plc. The defendants were the auditors of Fidelity plc. The plaintiffs claimed that in making the decision to do so, they relied upon the defendants’ audit of Fidelity plc as set out in the latter company’s annual accounts. The defendants’ audit was allegedly performed negligently, and it was claimed that Fidelity’s profits were not as high as the defendants had projected, a projection upon which the plaintiffs relied. The end result was that the share price paid by the plaintiffs exceeded their true value. The plaintiffs sued the defendants for negligent misstatement on the basis of Hedley Byrne & Co Ltd v Heller & Partners Ltd No doubt it can be said to be foreseeable that those accounts may find their way into the hands of a person who may use them for such purposes or indeed other purposes and lose money as a result. But to impose a liability in those circumstances is to hold, contrary to all the recent authorities, that foreseeability alone is sufficient, and to ignore the statutory duty which enjoins the preparation of and certification of those accounts. I think that before the existence and scope of any liability can be determined, it is necessary first to determine for what purposes and in what circumstances the information in question is to be given. If a would-be investor or predator commissions a report which he will use, and which the maker of the report knows he will use, as a basis for his decision whether or not to invest or whether or not to make a bid, it may not be difficult to conclude that if the report is negligently prepared and as a result a decision is taken in reliance upon it and financial losses then follow, a liability will be imposed upon the maker of that report. 37 Caparo must be understood in the context of the statutory requirements of audited accounts of a company. On this we can do better than quote the following passage from the speech of Lord Oliver at p 630: My Lords, the primary purpose of the statutory requirement that a company’s accounts shall be audited annually is almost self-evident. The structure of the corporate trading entity, at least in the case of public companies whose shares are dealt with on an authorised Stock Exchange, involves the concept of a more or less widely distributed holding of shares rendering the personal involvement of each individual shareholder in the day-to-day management of the enterprise impracticable, with the result that management is necessarily separated from ownership. The management is confided to a board of directors which operates in a fiduciary capacity and is answerable to and removable by the shareholders who can act, if they act at all, only collectively and only through the medium of a general meeting. Hence the legislative provisions requiring the board annually to give an account of its stewardship to a general meeting of the shareholders. This is the only occasion in each year upon which the general body of shareholders is given the opportunity to consider, to criticise and to comment upon the conduct by the board of the company’s affairs, to vote upon the directors’ recommendation as to dividends, to approve or disapprove the directors’ remuneration and, if thought desirable, to remove and replace all or any of the directors. It is the auditors’ function to ensure, so far as possible, that the financial information as to the company’s affairs prepared by the directors accurately reflects the company’s position in order, first, to protect the company itself from the consequences of undetected errors or, possibly, wrongdoing (by, for instance, declaring dividends out of capacity) and, secondly, to provide shareholders with reliable intelligence for the purpose of enabling them to scrutinise the conduct of the company’s affairs and to exercise their collective powers to reward or control or remove those to whom that conduct has been confided. Thus, such audited accounts are not intended to be used and relied upon by shareholders for their own investment in the purchase or disposal of shares of the company, and Hedley Byrne was held not to have such wide application. Lord Oliver said at p 638: What can be deduced from the Hedley Byrne case, therefore, is that the necessary relationship between the maker of a statement or giver of advice (‘the adviser’) and the recipient who acts in reliance upon it (‘the advisee’) may typically be held to exist where (1) the advice is required for a purpose, whether particularly specified or generally described, which is made known, either actually or inferentially, to the adviser at the time when the advice is given; (2) the adviser knows, either actually or inferentially, that his advice will be communicated to the advisee, either specifically or as a member of an ascertainable class, in order that it should be used by the advisee for that purpose; (3) it is known either actually or inferentially, that the advice so communicated is likely to be acted upon by the advisee for that purpose without independent inquiry, and (4) it is so acted upon by the advisee to his detriment. 38 In our opinion, Caparo has no application here. As the learned judge held and we agree, RSP were involved in the development of the condominium right from the start. They were engaged by the developers to design and supervise the construction of the condominium including the common property and the developers relied on the exercise of reasonable care and skill of their architects and they (the architects) undertook such responsibilities. RSP as the architects were aware at that time that the developers would apply for subdivision of the units and upon completion of the construction of the units they would apply to register a strata title plan and apply for the issue of separate subsidiary strata certificates of title to the units. They were also aware that upon the registration of the strata title plans the management corporation would come into existence. Visa- vis the developers there was an assumption of responsibility of professional competence on the part of the architects and the architects knew that the developers would be relying on their exercising reasonable care and skill. The management corporation which later came into existence was merely a statutory creation and was a successor to the developers with respect to the common property. In respect of such common property the architects knew that the management corporation would be in charge and would be managing the common property and would depend on their care and skill in the design and supervision of the construction of the common property. In such a situation there was sufficient degree of proximity in the relationship between the management corporation and the architects as would give rise to a duty on the part of the architects to avoid the loss as sustained by MCST in this case. 39 With regard to the element of reliance which was regarded by RSP as critical, we think that it was also present in the relationship between the management corporation and the architects. The management corporation depends on the developer, inter alia, to unite resources and to co-ordinate the execution of the project, and on the architects, inter alia, to get the design of the building right. 40 In this we are reinforced by Portsea Island Mutual Co-operative Society Ltd v Michael Brasher Associates (1990) 6 PN 43; (1990) 6 Const LJ 63, a decision preceding the House of Lords’ decision in Murphy. Judge Newey QC there held that the architect who was responsible for the design and supervision of a supermarket was liable for the expenses for removing certain brick slips which posed a danger to customers. The basis of the duty owed to the supermarket was the reliance on the special skill of the architect, who knew that the supermarket was the intended occupier. 41 Relying on Caparo and presumably also on Hedley Byrne counsel for RSP submitted that professionals like architects should only be liable in negligence to a “known recipient” in respect of works carried out by them for a “known purpose”. Otherwise, they would be made liable in effect “in an indeterminate amount for an indeterminate time to an indeterminate class”. The short answer to this is that for the reasons given in para 38 above MCST, as the management corporation of the condominium, was a “known recipient” and the work carried out by RSP for the condominium was for a “known purpose”. For the same reason as this court gave in Ocean Front, the amount recoverable is determinate, the person to whom RSP is liable is definable and the time span is not indeterminate. 42 It is important to understand that the concept of “economic loss”, just like the concept of “reliance” does not run uniformly through the law of negligence. It may not be considered in abstraction, but must be considered together with all the other “labels” of liability, such as “foreseeability”, “reliance”, and “reasonability;” Thus, where the loss is economic in nature, different requirements are necessary — depending on the nature of the negligent act or omission — to give rise to liability. As this court emphasised in Ocean Front, the question is not whether a duty was owed by A to B, but whether a duty was owed by A to B to avoid the loss incurred by B. 43 The House of Lords in Murphy appeared to consider that there were no special factors distinguishing negligence in the construction of a building from negligence in the manufacture of a consumer good. In so doing, their Lordships accepted the analogies painted by Lord Brandon in Junior Books between building construction and product manufacture. As Mason CJ, Deane and Gaudron JJ held in Bryan v Maloney, however, there are, in our opinion, two distinguishing factors. Firstly, the investment in real property is likely to represent a significant, if not the most significant, investment in an individual’s lifetime (as opposed to the purchase of a mere chattel). The scale of the investment in money terms is far greater than what is involved in the acquisition of a chattel. Secondly, the permanence of the structure may give rise to a greater expectation than a chattel. We think those arguments apply a fortiori in Singapore, where land is not only scarce but expensive. We think that to treat houses and consumer goods alike would be to ignore simple realities, realities which, to our mind, are instrumental in dictating the expectations and degree of reliance placed upon the persons developing, building or designing the structure which stands upon it. 44 In considering D & F Estates and Murphy, it is important to bear in mind that in England there was passed in 1972 the Defective Premises Act which provided for consumer protection in respect of building defects. It seems to us that considerable weight was given to this legislation by the House of Lords in their deliberations. In particular, in D & F Estates, Lord Bridge of Harwich (at pp 193– 195) referred to this Act and the recommendations of the Law Commission report on “Civil Liability of Vendors and Lessors for Defective Premises” (Law Com No 40) dated 15 December 1970 following which that Act was enacted. In Murphy, Lord Mackay of Clashfern L C said at p 457: I am of the opinion that it is relevant to take into account that Parliament has made provisions in the Defective Premises Act 1972 imposing on builders and others undertaking work in the provision of dwellings obligations relating to the quality of their work and the fitness for habitation of the dwelling. For this House in its judicial capacity to create a large new area of responsibility on local authorities in respect of defective buildings would be in my opinion not be a proper exercise of judicial power. Reference to this Act was also made by Lord Keith of Kinkel at p 472 and Lord Oliver of Aylmerton at p 491. And Lord Jauncey of Tullichettle said at p 498: Parliament imposed a liability on builders by the Defective Premises Act 1972 — a liability which falls far short of that which would be imposed upon them by Anns. There can therefore be no policy reason for imposing a higher common law duty on builders, from which it follows that there is equally no policy reason for imposing such a high duty on local authorities. Parliament is far better equipped than the courts to take policy decisions in the field of consumer protection. 45 It bears mentioning that D & F Estates and Murphy have not been followed in New Zealand: see Invercargill City Council v Hamlin [1994] 3 NZLR 513, and in Canada: see Winnipeg Condominium Corporation No 36 v Bird Construction Co (1995) 121 DLR (4d) 193. Both these cases were discussed and considered in Ocean Front. Since then, there has been a further development in Invercargill City Council. It went on appeal from the New Zealand Court of Appeal to the Privy Council: see But in the present case the judges in the New Zealand Court of Appeal were consciously departing from English case law on the ground that conditions in New Zealand are different. Were they entitled to do so? The answer must surely be ‘Yes’. … the Court of Appeal of New Zealand should not be deflected from developing the common law of New Zealand (nor the Board from affirming their decisions) by the consideration that the House of Lords in D & F Estates Ltd v Church Commissioners for England Later his Lordship referred to Canadian cases and Australian cases and said at p 642: Their Lordships cite these judgments in other common law jurisdictions not to cast any doubt on Murphy’s case Remaining issues 46 We now turn to the remaining issues in the appeal which were: (a) whether the trial judge erred in fact in attributing the failure of the claddings to RSP’s faulty design; and (b) whether the trial judge erred in finding the third party not liable. Design of the claddings 47 The learned judge classified the breaches of duty complained of into two categories: breach with respect to the design of the gable end walls and breach in the supervision of the construction of the walls. The learned judge considered that the responsibilities of RSP were those of design and supervision generally. With regard to design, the learned judge found that RSP were in breach in three areas: in failing to provide the movement joints in the gable end walls; in failing to provide adequate wall ties between the inner and outer leaves of the cavity brickwork; and in failing to provide an adequate method of adhesion in the claddings. As for the supervision, the learned judge found that RSP were not in breach of duty. 48 The issue turned on the evidence adduced. Evidence for MCST was given by Mr Paul Crispin Casimir of Casimir-Mrowczynski, who is a chartered building surveyor and at the material time was in the employ of Murray-North. He carried out most of the investigations into the incident and supervised the rectification works. There was also the evidence of Mr John Philip Jones, a chartered structural engineer and building surveyor, of Messrs Harris and Sutherland, who were appointed by the insurers. For RSP the evidence was given by Mr Alan Choe, a partner of the firm, and Ms Wong Meng Heng, the project architect for Eastern Lagoon II. RSP also led expert evidence given by Mr Yang Soo Suan, a local architect, and Dr YS Lau, a chartered civil and structural engineer. 49 It was common ground before the learned judge that the building industry follows the British Codes of Practice and there must be specific reasons for any departure from the Codes. Such Codes states, inter alia, that consideration should be given at the design stage to the provision of movement joints in claddings along the walls. There was also produced a circular dated 13 September 1984 from the President of the Singapore Institute of Architects to its members enclosing a letter from the PWD to the President reminding members of prior instances of external tile failure and emphasising the need for good practice on the part of architects in external tiling works which included, inter alia, the provision of movement joints where the tile surface was large and continuous. 50 The evidence of Mr Jones was that the predominant cause for the failure of the claddings was the absence of movement joints and that if there were movement joints a lack of wall ties would not cause the failure provided that there were bonding ties between the outer leaf of the brickwork and the reinforced concrete frame. Mr Casimir’s evidence was that the complete absence of the movement joints in the gable end walls was one of the main causes for the failure. The learned judge accepted the evidence of Mr Jones and Mr Casimir. 51 Turning to the evidence in support of RSP the learned judge did not find it satisfactory. It was accepted by Mr Yang and Mr Choe that following the British Codes of Practice movement joints should be provided along stretches of wall, such as the walls in the tower blocks of the condominium in question. However, in a supplemental affidavit Mr Yang testified that it was an accepted and normal practice among the architects in Singapore not to provide movement joints for the external fair face brick and tiling works and he quoted numerous instances of multi-storey buildings in Singapore where no movement joints were provided. As for Dr Lau, initially his evidence was to the effect that the absence of the movement joints was one of the principal causes for the failure of the brick tiles. Subsequently, in his supplemental affidavit he said that the primary cause of the failure was the inadequate surface preparation of the concrete background, resulting in debonding of the tiles. The learned judge found that there was a shift in the evidence of these two witnesses. She said at para 40: I am persuaded by the evidence that both these witnesses changed their positions because the defendants themselves, having seen the affidavit of evidence-in-chief filed by Mr Casimir which referred to the interrogatory whereby Mr Lai confirmed that the defendants did not provide movement joints in the design, changed their stand from one accepting that the absence of movement joints was the or a principal cause but blaming the third party for such absence to one accepting that it was their responsibility that there were no movement joints but claiming that such absence was not contributory or only marginally contributory to the failure. This change in position was confirmed by the defendants’ opening statement filed on 25 September 1997. 52 With regard to the letter of PWD, the witnesses for RSP gave various interpretations to the “large and continuous area”. According to Ms Wong, such area normally meant an area of 20 ft by 20 ft, and according to Mr Choe such area would be anything beyond 6 m by 12 m. Mr Choe, however, conceded that at the Keck Seng Tower, which was constructed during the period between 1981 and 1984, movement joints were at storey height intervals of less than 6 m height. As for Mr Yang, he said that the external claddings in this case were not so large and continuous as to require movement joints, but he conceded that the PWD letter was a reminder to architects that for projects like the condominium movement joints should have been provided for the brick tiles. The evidence of Mr Yang showed that in the early 1980s there were at least two high rise office buildings designed by his firm and built during the period 1981 to 1984 where movement joints for the brick/tile claddings were provided. One was NOL Building and the other was Keck Seng Tower. Clearly, RSP were unable to establish that there was an established practice not to incorporate movement joints into the architectural designs at the time of construction of Eastern Lagoon II. The learned judge came to following conclusion at para 54: I have come to the conclusion that the weight of the evidence points to the absence of movement joints as being one of the main causes of the failure of the wall cladding in the condominium and that the failure mechanism was that put forward by the plaintiffs. I have been influenced in particular by the factors set out in paras 29 to 31 above as well as the twists and turns in the testimony of the defendants’ witnesses (excluding, of course, the neutral HDB witnesses) which convinced me that whatever the validity of the technical points they made for other factors being contributory to the failure, each of them at heart believed that the absence of the movement joints played a significant part in creating the problem. I was also impressed by the objectivity and impartiality of the plaintiffs’ expert witnesses. They conducted their respective investigations and prepared their reports independently of each other. Their objectives were to ascertain the causes of the failure and at the time the investigations were undertaken neither had any reason to assign blame to any particular party. They were investigating not explaining nor excusing. 53 The learned judge also found that RSP had failed to provide adequate wall ties between the inner and the outer leaves of the cavity walls which contributed to the failure. On this she relied on the evidence of Mr Casimir who had conducted an extensive and detailed inspection of the gable end walls of the condominium and his findings were that there were negligible wall ties to the cavity brick that failed and that there were few ties to restrain the outer leaf or to allow the leaves to act as one. This evidence was corroborated by Mr Jones. There was evidence that the ties used were in accordance with the specifications. It was common ground between the experts on both sides that the untreated mild steel wall ties were inadequate for the purpose of bonding the internal and external walls together. The learned judge found at para 62: The effect of insufficient or inadequate ties was explained by Mr Jones. He stated that had the two leaves been adequately tied together, then the load due to differential movements could have been shared between them thereby improving the strength of the wall under vertical loading by improving its buckling resistance. As it was, the inadequately tied outer leaf bore the entire load itself and this contributed to the bricks falling. In so far as the bricks which fell are concerned, Dr Lau’s view was that the lack of wall ties was one of the main causes of the bricks falling. The two structural engineers being in agreement that a lack of ties had a causative effect in relation to the falling of the bricks and there being no credible evidence to contradict this opinion, I accept it and make a finding to that effect. 54 MCST also emphasised that the trial judge’s findings that the wall ties had corroded was reinforced by Mr Casimir’s visual inspection of the walls, including the opening up of areas in the walls and the inspection of the cavities. The sufficiency of this alleged inspection was challenged by the appellants, in that Mr Casimir’s notes, which he claimed to have left in the possession of Murray-North, were not disclosed, and their disappearance remained unexplained by the MCST when we heard the appeal. The MCST, however, emphasised that it was common ground, and agreed to by RSP’s experts, that the use of untreated mild steel was patently unsatisfactory, and that corrosion would have rendered those ties ineffective even if present. RSP failed to require that the ties to be used had to be of the quality and material specified in the British code. 55 The learned judge also found that the general failure of the claddings was contributed by the method of adhesion adopted, ie a simple cement and sand mortar base without the use of a reinforcement mesh or additives in the mortar. In coming to this conclusion she relied on the evidence of Mr Casimir. She found at para 74: I accept that as far as the failed panel was concerned, the substrate in that area was probably inadequately roughened. But that does not indicate an overall failure to prepare the substrate properly. It is much more likely that the generalised failure of the tiles was caused by the method of adhesion adopted, ie a simple cement and sand mortar base without the use of a reinforcement mesh or additives in the mortar. Mr Casimir as a building surveyor opined that failure is more probable than success when such a mortar mix is used for tile adhesion and Mr Yang, the defendants’ expert, accepted this opinion as correct. 56 On the evidence before her, the learned judge was justified in making the findings of fact as she did, and we could find no grounds for disturbing her findings. The third party’s position 57 We now turn to the position of EC. As the learned judge found that the causes for the failure of the claddings were inadequacies in the design, EC as the contractors could not be made liable for such failure. The learned judge said at para 98 and 99: 98 I have found that the primary causes of the failure were design inadequacies, ie the non-provision of movement joints and the non-specification of the use of reinforcement mesh and wall ties protected from corrosion. Bad workmanship in the sense of inadequate numbers of wall ties being used in the brick panels was not contributory to failure in the sense that even if adequate ties had been inserted they would have corroded anyway and would not have served their purpose. As far as inadequate roughening of the substrate is concerned, my finding was that there was insufficient evidence of this and, in any case, the method of adhesion chosen by the defendants was inadequate and likely to fail. The third party cannot be held responsible for such failure. 99 In these circumstances, the third party is not a joint tortfeasor and the defendants cannot claim any indemnity or contribution from the third party. We agree with the trial judge that even if the walls had been built to the utmost quality, they would have still collapsed because of the poor design. In the circumstances, it is unnecessary for us to consider whether there was any bad workmanship in the construction of the gable end walls. We also do not propose to deal with the arguments on the issue whether EC were liable for any bad workmanship in the works carried out by their sub-contractor. 58 In the result, the appeal failed and was dismissed. Appeal dismissed. Reported by Justin Chan Hsiang-yu