Chiu Teng Construction v Hartford Insurance: Third Parties Act & Insurer Liability
Chiu Teng Construction Co Pte Ltd (Chiu Teng) sued The Hartford Insurance Company (Singapore) Ltd (HI) in the High Court of Singapore, relying on the Third Parties (Rights Against Insurers) Act after obtaining a judgment against Brentford Construction (S) Pte Ltd (Brentford) for rectification costs due to damage caused by Brentford's works. The court, led by Judicial Commissioner Woo Bih Li, found in favor of Chiu Teng, holding HI liable for the $446,600.08 judgment against Brentford, plus interest and costs. The court rejected HI's policy defenses and determined that Chiu Teng did not need to re-prove the quantum of damages.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Chiu Teng Construction sued Hartford Insurance under the Third Parties Act for rectification costs. The court found Hartford liable for the judgment against Brentford.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Chiu Teng Construction Co Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| The Hartford Insurance Company (Singapore) Ltd (formerly known as The People's Insurance Co Ltd) | Defendant | Corporation | Judgment Against Defendant | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Chiu Teng was the main contractor for a housing development.
- Brentford was the contractor for sheet pile installation and extraction on an adjacent site.
- Hartford Insurance was Brentford's insurer under a Contractors All Risk Policy.
- Sheet pile extraction by Brentford caused vibrations and soil movement.
- The soil movement damaged six houses in Chiu Teng's development.
- Chiu Teng had to rectify the damage, including installing micropiles.
- Brentford was wound up, and Chiu Teng obtained leave to sue Brentford.
- Chiu Teng obtained a judgment against Brentford for $446,600.08.
- Chiu Teng then sued Hartford Insurance under the Third Parties Act.
5. Formal Citations
- Chiu Teng Construction Co Pte Ltd v The Hartford Insurance Company (Singapore) Ltd (formerly known as The People's Insurance Co Ltd), Suit 603/2000/G, [2001] SGHC 119
6. Timeline
| Date | Event |
|---|---|
| Contractors All Risk Policy No D95/333/02788 issued by The Hartford Insurance Company to Brentford Construction. | |
| Chiu Teng's project manager felt a vibration attributed to sheet pile extraction works carried out by Brentford, causing soil movement and damage. | |
| Companies Winding Up No 275 of 1997. | |
| Brentford was wound up by order of court. | |
| Chiu Teng obtained leave of court to commence action against Brentford for the cost of rectification works. | |
| Chiu Teng filed a Writ of Summons in Suit No 442 of 1999 against Brentford. | |
| Chiu Teng obtained an interlocutory judgment with the consent of the Official Receiver, the liquidator of Brentford. | |
| Assessment of damages date. | |
| Final judgment was awarded against Brentford for $446,600.08 with interest at 6% per annum. | |
| Chiu Teng commenced action against HI relying on Section 1 of the Third Parties (Rights Against Insurers) Act. | |
| Decision Date. |
7. Legal Issues
- Liability of Insurer to Third Party under the Third Parties (Rights Against Insurers) Act
- Outcome: The court held that the insurer was liable to the third party under the Act and that the third party did not need to re-prove the quantum of damages.
- Category: Substantive
- Sub-Issues:
- Policy Defenses
- Proof of Quantum of Damages
- Interpretation of Insurance Policy Terms
- Outcome: The court interpreted the policy terms in favor of the insured, finding that the exclusion clause did not apply and that the stability of the structures had been impaired.
- Category: Substantive
- Sub-Issues:
- Exclusion Clauses
- Definition of 'Structure'
- Impairment of Stability
- Time Bar under Insurance Policy
- Outcome: The court held that the claim was not time-barred under the insurance policy because no valid claim had been made and rejected.
- Category: Procedural
- Sub-Issues:
- Rejection of Claim
- Commencement of Action
- Binding Effect of Judgment Against Insured on Insurer
- Outcome: The court held that the judgment against the insured was binding on the insurer and that the insurer could not require the third party to re-prove the quantum of damages.
- Category: Substantive
- Sub-Issues:
- Estoppel
- Res Judicata
8. Remedies Sought
- Indemnity for Judgment against Insured
- Payment of Rectification Costs
- Interest
- Costs
9. Cause of Actions
- Claim under Third Parties (Rights Against Insurers) Act
- Breach of Insurance Contract
10. Practice Areas
- Construction Litigation
- Insurance Litigation
11. Industries
- Construction
- Insurance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Normid Housing Association Ltd v Ralph | Unknown | Yes | [1989] 1 Lloyds Law Rep 265 | England | Cited for the proposition that the insured must be wound up to be entitled to an indemnity under the Act. |
| Post Office v Norwich Union Fire Insurance Society Ltd | Court of Appeal | Yes | [1967] 2 QB 363 | England | Cited for the proposition that the victim must have clearly established the insured's liability by getting the insured to admit liability or by getting a judgment against the insured. |
| Doris Bradley v Eagle Star Insurance Co Ltd | House of Lords | Yes | [1989] 1 Lloyds Law Report 456 | England | Cited for the proposition that the victim must have clearly established the insured's liability by getting the insured to admit liability or by getting a judgment against the insured. |
| Socfin Co Ltd v Chairman, Klang Town Council | Unknown | Yes | [1964] 30 MLJ 325 | Malaysia | Cited to define the ordinary meaning of 'structure' in the context of rating assessment. |
| Shimizu Corporation v Lim Tiang Chuan | Unknown | Yes | [1993] 3 SLR 77 | Singapore | Cited for the interpretation of a clause in identical terms as Clause 8 in the present case, regarding the time limit for commencing action after rejection of a claim. |
| Federal Insurance Co v Nakano Singapore (Pte) Ltd | Court of Appeal | Yes | [1992] 1 SLR 390 | Singapore | Cited to determine the essential ingredients of a claim, specifically the necessity of a demand or assertion of a particular right. |
| Continental Casualty Co of Canada v Yorke | Supreme Court of Canada | Yes | Continental Casualty Co of Canada v Yorke [1930] 1 DRL 609 | Canada | Cited regarding the right of action against the insurer and the extent to which the judgment against the insured is binding on the insurer. |
| King v Norman | Unknown | Yes | King v Norman [1847] 4 CB 884 | England | Cited for the proposition that the mere production of a judgment is not evidence of the damage sustained. |
| Bourbonnie v Union Insurance Society of Canton Ltd | Alberta Supreme Court | Yes | Bourbonnie v Union Insurance Society of Canton Ltd [1959] 22 DLR (2d) 419 | Canada | Cited regarding the defenses available to the insurer and the nature of the plaintiff's action against the insurer. |
| Sedam v Simcoe & Erie General Insurance Co | British Columbia Supreme Court | Yes | Sedam v Simcoe & Erie General Insurance Co 147 DRL (3d) 159 | Canada | Cited regarding whether the negligence of the insured had to be proved again by the plaintiff in order to recover against the insurers. |
| Carwald Concrete & Gravel Co Ltd v General Security Insurance Co of Canada et al | Alberta Court of Appeal | Yes | [1985] 24 DLR (4th) 58 | Canada | Cited regarding the evidence required to support a judgment against the insurer and whether issues previously decided by the court should be retried. |
| Parker v Lewis | Unknown | Yes | [1873] LR 8 Ch App 1035 | England | Cited for the principle that a person who has covenanted to indemnify another against liabilities is estopped from disputing the judgment in an action against the party indemnified. |
| Mercantile Investment and General Trust Company v River Plate Trust, Loan and Agency Company | Unknown | Yes | [1893] 1 Ch 578 | England | Cited for the principle that an estoppel arises only by virtue of a term implied in an express covenant of indemnity, and is only between the party indemnifying and the party indemnified. |
| Wood v Perfection Travel | Unknown | Yes | [1996] LRLR 233 | England | Cited for the proposition that HI would have been able to add itself as a party in the Brentford action. |
| Lister v. Romford Ice & Cold Storage Co. | Unknown | Yes | [1957] 1 All E.R. 125 | England | Cited regarding proof of liability by proving a judgment. |
| Green v New River Co | Unknown | Yes | [1792] 4 Term Rep 589 | England | Cited regarding proof of liability by proving a judgment. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Third Parties (Rights Against Insurers) Act (Cap 395) | Singapore |
| Third Parties (Rights Against Insurers) Act (Cap 395) | Singapore |
| Motor Vehicles (Third-Party Risks and Compensation) Act (Cap 189) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Third Parties (Rights Against Insurers) Act
- Contractors All Risk Policy
- Rectification Works
- Micropiles
- Policy Defenses
- Winding Up
- Interlocutory Judgment
- Final Judgment
- Soil Movement
- Encroachment
- Stability of Structures
- Contra Proferentem Rule
15.2 Keywords
- insurance
- construction
- third party
- rights
- insurer
- liability
- judgment
- rectification
- damages
17. Areas of Law
16. Subjects
- Insurance
- Construction
- Civil Litigation