Kay Lim v Soon Douglas: Implied Terms, Indemnity Clauses & Crane Dismantling Negligence
In Kay Lim Construction & Trading Pte Ltd v Soon Douglas (Pte) Ltd and another, the High Court of Singapore heard a claim by Kay Lim against Soon Douglas for breach of contract, following a crane collapse during dismantling operations. Kay Lim had contracted with Soon Douglas for the lease of tower cranes, and the collapse occurred due to the negligence of Soon Douglas's subcontractor, Chit Guan Engineering Resources Pte Ltd. The court, presided over by Quentin Loh J, found in favor of Kay Lim, holding that Soon Douglas had breached implied terms of the rental agreement to provide skilled labor and ensure the safe dismantling of the cranes. The court also addressed the validity and scope of indemnity and exclusion clauses in the contract, as well as the applicability of the Unfair Contract Terms Act. Damages are to be assessed at a separate hearing.
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
Kay Lim sues Soon Douglas for breach of contract after a crane collapse. The court addressed implied terms, indemnity clauses, and UCTA.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Kay Lim Construction & Trading Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | Richard Tan, Diana Xie, Chia Aileen |
| Soon Douglas (Pte) Ltd | Defendant | Corporation | Judgment against Defendant | Lost | Michael Eu, Pak Waltan |
| Chit Guan Engineering Resources Pte Ltd | Defendant | Corporation | Interlocutory judgment against Defendant | Default | Leong Kit Ying Melissa |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | Justice | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Richard Tan | Tan Chin Hoe & Co |
| Diana Xie | Tan Chin Hoe & Co |
| Chia Aileen | Tan Chin Hoe & Co |
| Michael Eu | United Legal Alliance LLC |
| Pak Waltan | United Legal Alliance LLC |
| Leong Kit Ying Melissa | Genesis Law Corporation |
4. Facts
- Kay Lim contracted with Soon Douglas for the lease of tower cranes for a construction project.
- Soon Douglas subcontracted the dismantling of the cranes to Chit Guan.
- A tower crane collapsed during dismantling due to the negligence of Chit Guan's workers.
- The collapse resulted in one death, injuries, and damage to the worksite.
- Kay Lim sued Soon Douglas for breach of contract.
- The Rental Agreement contained indemnity and exclusion clauses.
- A Stop Work Order was issued by the Building and Construction Authority following the accident.
5. Formal Citations
- Kay Lim Construction & Trading Pte Ltd v Soon Douglas (Pte) Ltd and another, Suit No 58 of 2011, [2012] SGHC 186
6. Timeline
| Date | Event |
|---|---|
| Rental Agreement signed | |
| Tower Crane 4 delivered and erected | |
| Soon Douglas entered into an agreement with Chit Guan | |
| Tower Crane 4 collapsed | |
| Restriction placed on Kay Lim from tendering for HDB projects | |
| Judgment in default of appearance entered against Chit Guan | |
| Kay Lim entered interlocutory judgment against Chit Guan | |
| Oral judgment given | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Soon Douglas breached implied terms of the Rental Agreement.
- Category: Substantive
- Sub-Issues:
- Breach of implied terms
- Failure to provide skilled labour
- Failure to ensure safe dismantling
- Interpretation of Contractual Clauses
- Outcome: The court construed the indemnity and exclusion clauses narrowly, finding that they did not fully protect Soon Douglas from liability.
- Category: Substantive
- Sub-Issues:
- Exemption clauses
- Indemnity clauses
- Scope of insurance obligations
- Application of Unfair Contract Terms Act
- Outcome: The court found that Section 3 of the UCTA applied to the Rental Agreement, but the exemption clause did not breach the test of reasonableness.
- Category: Substantive
- Sub-Issues:
- Reasonableness of exemption clauses
- Standard terms of business
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Negligence
10. Practice Areas
- Commercial Litigation
- Construction Disputes
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ng Giap Hon v Westcomb Securities Pte Ltd and other | Court of Appeal | Yes | [2009] 3 SLR(R) 518 | Singapore | Cited for the 'business efficacy' and 'officious bystander' tests for implying a term in fact. |
| Forefront Medical Technology (Pte) Ltd v Modern-Pak Pte Ltd | High Court | Yes | [2006] 1 SLR 927 | Singapore | Cited for the 'business efficacy' and 'officious bystander' tests for implying a term in fact. |
| Man Financial (S) Pte Ltd (Formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David | Court of Appeal | Yes | [2008] 1 SLR 663 | Singapore | Cited for the application of the 'blue pencil' test. |
| CLAAS Medical Centre Pte Ltd v Ng Boon Ching | Court of Appeal | Yes | [2010] 2 SLR 386 | Singapore | Cited for the application of the 'blue pencil' test. |
| Attwood v Lamont | King's Bench | Yes | [1920] 3 KB 571 | England and Wales | Cited regarding the severance of contract terms. |
| T Lucas and Co Ltd v Mitchell | Chancery Division | Yes | [1974] Ch 129 | England and Wales | Cited regarding the severance of contract terms. |
| Sadler v Imperial Life Assurance Co of Canada Ltd | Court of Appeal | Yes | [1988] IRLR 388 | England and Wales | Cited regarding the severance of contract terms. |
| Emjay Enterprises Pte Ltd v Skylift Consolidator (Pte) Ltd (Direct Services (HK) Ltd, third party) | High Court | Yes | [2006] 2 SLR(R) 268 | Singapore | Cited regarding the construction of exception clauses. |
| Singapore Telecommunications Ltd v Starhub Cable Vision Ltd | Court of Appeal | Yes | [2006] 2 SLR(R) 195 | Singapore | Cited regarding the construction of exemption clauses. |
| Photo Production Ltd v Securicor Transport Ltd | House of Lords | Yes | [1980] 1 AC 827 | United Kingdom | Cited regarding the construction of exemption clauses. |
| E E Caledonia Ltd v Orbit Valve Co Europe | High Court | Yes | [1994] 1 WLR 221 | England and Wales | Cited regarding the contra proferentum rule. |
| Smith v. South Wales Switchgear Co. Ltd. | House of Lords | Yes | [1978] 1 WLR 165 | United Kingdom | Cited regarding the construction of indemnity clauses. |
| Wisma Development Pte Ltd v Sing - The Disc Shop Pte Ltd | Court of Appeal | Yes | [1994] 1 SLR(R) 749 | Singapore | Cited regarding insurance clauses and intention to relieve liability. |
| Co-Operative Retail Services Limited and others v. Taylor Young Partnership and others | House of Lords | Yes | [2002] 1 WLR 1419 | United Kingdom | Cited regarding insurance clauses and intention to relieve liability. |
| Hadley v Baxendale | Court of Exchequer | Yes | [1854] 9 Ex 341 | England and Wales | Cited regarding direct and consequential loss. |
| Croudace Construction Ltd v Cawoods Concrete Products Ltd | Queen's Bench Division | Yes | [1978] 2 Lloyd’s Rep 55 | England and Wales | Cited regarding direct and consequential loss in construction contracts. |
| British Sugar plc v NEI Power Projects | Technology and Construction Court | Yes | (1998) 87 BLR 42 | England and Wales | Cited regarding direct and consequential loss in construction contracts. |
| Saint Line Limited v Richardsons, Westgarth & Co, Limited | Court of Appeal | Yes | [1940] 2 KB 99 | England and Wales | Cited regarding direct and consequential loss. |
| Hotel Services Limited v Hilton International Hotels (UK) Limited | Technology and Construction Court | Yes | [2000] BLR 235 | England and Wales | Cited regarding direct and consequential loss. |
| Deepak Fertilisers and Petrochemicals Corp v ICI Chemicals & Polymers | Commercial Court | Yes | [1999] 1 Lloyd’s Rep 387 | England and Wales | Cited regarding direct and consequential loss. |
| Pegler Ltd v Wang (UK) Ltd | Technology and Construction Court | Yes | [2000] BLR 218 | England and Wales | Cited regarding direct and consequential loss. |
| Millar’s Machinery Co Ltd v David Way & Son | N/A | Yes | 40 Com. Cas. 204 | N/A | Cited regarding direct and consequential loss. |
| Addax Ltd v Arcadia Petroleum Ltd | Commercial Court | Yes | [2000] 1 Lloyd’s Rep 493 | England and Wales | Cited regarding direct and consequential loss. |
| Econ Piling Pte Ltd and another (both formerly trading as Econ-NCC Joint Venture) v Shanghai Tunnel Engineering Co Ltd | High Court | Yes | [2011] 1 SLR 246 | Singapore | Cited regarding the definition of 'delay'. |
| Fraser v B.N. Furnam | N/A | Yes | [1967] 1 WLR 898 | N/A | Cited regarding insurance cover for reckless acts. |
| Alisa Craig Fishing Co. Ltd v Malvern Fishing Co. Ltd and another | House of Lords | Yes | [1983] 1 WLR 964 | United Kingdom | Cited regarding clauses that exclude liability and those which limit liability. |
| Kenwell & Co Pte Ltd v Southern Ocean Shipbuilding Co Pte Ltd | High Court | Yes | [1998] 2 SLR(R) 583 | Singapore | Cited regarding the 'reasonableness' of a term under s 3 of UCTA. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Workplace Safety and Health Act (Cap 354) | Singapore |
| Rules of Court (Cap 332, R5, 2006 Rev Ed) | Singapore |
| Unfair Contract Terms Act (Cap 396, Rev Ed 1994) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Tower Crane
- Rental Agreement
- Implied Terms
- Indemnity Clause
- Exclusion Clause
- Unfair Contract Terms Act
- Dismantling
- Stop Work Order
- Approved Crane Contractor
- Jacking Down Method
15.2 Keywords
- Construction
- Contract
- Negligence
- Crane
- Dismantling
- Singapore
- Kay Lim
- Soon Douglas
- Chit Guan
- Indemnity
- Exemption Clause
- UCTA
16. Subjects
- Contract Law
- Construction Law
- Civil Procedure
- Workplace Safety
17. Areas of Law
- Contract Law
- Construction Law
- Negligence
- Exemption Clauses
- Indemnity Clauses
- Unfair Contract Terms Act