Management Corporation v Liang Huat: Construction Contract, Indemnity vs. Warranty
The Management Corporation Strata Title Plan No. 1933 (the MC) appealed to the Court of Appeal of Singapore against the decision of the High Court, which dismissed their claim against Liang Huat Aluminium Ltd (Liang Huat) for breach of contract under a deed made on 27 October 1997. The MC claimed damages for defective aluminium windows and glazing works in the Domer Park condominium. The Court of Appeal allowed the appeal, holding that the MC had a right to sue Liang Huat for damages for breach of contract.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Management Corporation sued Liang Huat for breach of contract regarding defective aluminium windows. The Court of Appeal held that the MC had a right to sue for damages.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Management Corporation Strata Title Plan No 1933 | Appellant | Corporation | Appeal Allowed | Won | |
| Liang Huat Aluminium Ltd | Respondent | Corporation | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Judge of Appeal | Yes |
| Lai Kew Chai | Judge | No |
| L P Thean | Judge of Appeal | No |
4. Counsels
4. Facts
- Hong Leong engaged Comtech as the main contractor.
- Comtech engaged Liang Huat as the sub-contractor for aluminium windows and glazing works.
- Comtech and Liang Huat executed a deed in favour of Hong Leong regarding the works.
- Defects appeared in the works after completion.
- Liang Huat refused to accept responsibility for the defects.
- Hong Leong assigned its rights under the deed to the MC.
- Liang Huat failed to rectify the defects despite demands from the MC.
5. Formal Citations
- Management Corporation Strata Title Plan No 1933 v Liang Huat Aluminium Ltd, CA 125/2000, [2001] SGCA 41
6. Timeline
| Date | Event |
|---|---|
| Deed executed between Comtech and Liang Huat in favour of Hong Leong. | |
| Representatives of Liang Huat visited the site and inspected the defects. | |
| Further inspection of the Works. | |
| Hong Leong assigned its rights under the Deed to the MC. | |
| MC demanded that Liang Huat rectify the defects. | |
| Formal notice given to Liang Huat to rectify the defects. | |
| Court of Appeal decision. |
7. Legal Issues
- Breach of Contract
- Outcome: The court held that Liang Huat was in breach of contract for failing to rectify defects in the works.
- Category: Substantive
- Sub-Issues:
- Failure to rectify defects
- Failure to perform obligations under deed
- Construction of Deed
- Outcome: The court held that the deed imposed obligations on Liang Huat, and a breach of those obligations gave rise to an action for damages at law.
- Category: Substantive
- Sub-Issues:
- Whether deed is an indemnity or warranty
- Interpretation of contractual terms
- Contracts of Indemnity
- Outcome: The court held that the MC's right to claim damages for breach of contract was not limited to a claim for reimbursement under the indemnity clause.
- Category: Substantive
- Sub-Issues:
- When cause of action arises
- Breach of obligations under indemnity
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Construction Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Walsh v Trevanion and Anor | Queen's Bench | Yes | (1850) 15 QB 733 | England and Wales | Cited for the rule of construction on the recital in relation to the operative part of a deed. |
| Ex parte Dawes, re Moon | Court of Appeal | Yes | (1886) 17 QBD 275 | England and Wales | Cited to explain the relationship of a recital in a deed to its operative part. |
| Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as H E Hansen-Tangen) | House of Lords | Yes | [1976] 1 WLR 989 | England and Wales | Cited for the principle that the court should place itself in the same factual matrix as the parties at the time the deed was executed. |
| Prenn v Simmonds | House of Lords | Yes | [1971] 3 All E R 237 | England and Wales | Cited for the principle that evidence of negotiations or parties' intentions is inadmissible in construing a deed. |
| Pacific Century Regional Development Ltd v Canadian Imperial Investment Pte Ltd | Court of Appeal | Yes | (6 April 2001) | Singapore | Cited for the principle that evidence of mutual understanding in the negotiation of a contract is inadmissible in construing the contract. |
| Johnston v Salvage Association | Queen's Bench Division | Yes | (1887) 19 QBD 458 | England and Wales | Cited for the principle that in equity, a contract to indemnify can be specifically enforced before a breach of contract would sustain an action at law. |
| British Union and National Insurance Company v Rawson | Court of Appeal | Yes | [1916] 2 Ch 476 | England and Wales | Cited for the principle that in equity, the indemnified may call upon the indemnifier to pay the debt either to him or to the principal creditor before having paid himself. |
| Firma C-Trade S.A. v Newcastle P & I Association | House of Lords | Yes | [1991] 2 AC 1 | England and Wales | Cited for the principle that since the passing of the Supreme Court of Judicature Acts 1873 and 1875, the equitable remedy has prevailed over the remedy at law. |
| Telfair Shipping Corporation v Intersea Carriers S A | Queen's Bench Division | Yes | [1985] 1 WLR 553 | England and Wales | Cited for the principle that the extent of the indemnity and the time at which the cause of action arises will depend on the construction of the contract. |
| P & M Kaye Ltd v Hosier & Dickinson Ltd | House of Lords | Yes | [1972] 1 WLR 146 | England and Wales | Cited for the principle that a party to a contract is entitled to recover consequential damage resulting from the other party's breach, unless the contract states otherwise. |
| Pearce And High Ltd v John P Baxter and Anor | Court of Appeal | Yes | [1999] BLR 101 | England and Wales | Cited for the principle that a clause in a building contract does not take away the right to sue for damages for breach of contract at common law unless there are clear, express words or a clear and strong implication. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Land Titles (Strata) Act (Cap 158, 1999 ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Indemnity
- Warranty
- Deed
- Defects
- Rectification
- Reimbursement
- Breach of Contract
- Aluminium Windows
- Glazing Works
15.2 Keywords
- Contract
- Construction
- Indemnity
- Warranty
- Damages
- Singapore
- Breach of Contract
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 75 |
| Contracts | 60 |
| Guarantees and indemnities | 60 |
| Credit and Security | 50 |
| Construction of deed | 50 |
16. Subjects
- Contract Law
- Construction Law
- Indemnity
- Warranty