Management Corporation v Orion-One: Construction Defects & Contractor Negligence
In Management Corporation Strata Title Plan No 3556 v Orion-One Development Pte Ltd (in liquidation) and Sanchoon Builders Pte Ltd, the High Court of Singapore heard a suit brought by the Management Corporation Strata Title Plan No 3556 (MCST) against Orion-One Development Pte Ltd (Orion-One), the developer, and Sanchoon Builders Pte Ltd (Sanchoon), the main contractor, regarding defects in the Northstar @ AMK building. The MCST, representing subsidiary proprietors, claimed Orion-One breached sale and purchase agreements (SPAs), and alleged negligence and breach of warranties against Sanchoon. The court found Orion-One liable for breaches of the SPAs due to construction defects and Sanchoon liable for negligence and breach of warranties, holding both responsible for specific defects in the building. The court ruled in favor of the MCST and the subsidiary proprietors it represented.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff in part.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
MCST sues Orion-One and Sanchoon for building defects. The court found breaches of contract and negligence, holding both liable for specific defects.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Orion-One Development Pte Ltd (in liquidation) | Defendant | Corporation | Judgment against Defendant in part | Lost | |
| Sanchoon Builders Pte Ltd | Defendant | Corporation | Judgment against Defendant in part | Lost | |
| Management Corporation Strata Title Plan No 3556 | Plaintiff | Corporation | Judgment for Plaintiff in part | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge | Yes |
4. Counsels
4. Facts
- The MCST commenced an action against the developer, Orion-One, and the main contractor, Sanchoon, regarding defects in the Northstar @ AMK building.
- The MCST claimed Orion-One breached sale and purchase agreements (SPAs) with subsidiary proprietors due to construction defects.
- The MCST alleged Sanchoon was negligent in constructing the building and breached warranties related to the construction work.
- The MCST represents subsidiary proprietors in a claim against Orion-One as permitted under s 85(1) of the Building Maintenance and Strata Management Act.
- The MCST attempted to prove its authority to represent the participating subsidiary proprietors by adducing letters of authorisation (“LOAs”) signed by each of them.
- The court found that the standard of good and workmanlike manner requires that the Building be constructed with proper care and skill.
- The court found that the MCST gave Sanchoon sufficient time and opportunity to rectify the defects before commencing this suit.
5. Formal Citations
- Management Corporation Strata Title Plan No 3556 v Orion-One Development Pte Ltd (in liquidation) and another, Suit No 652 of 2014, [2019] SGHC 70
6. Timeline
| Date | Event |
|---|---|
| Temporary Occupation Permit for the Building was issued | |
| Certificate of Statutory Completion was issued | |
| Orion-One handed over management of the Building to the MCST | |
| Defects in the Building were noticed | |
| Joint inspection of the Building was conducted | |
| Sanchoon carried out works to rectify the defects | |
| Orion-One assigned the Warranties to the MCST by a deed of assignment | |
| MCST passed a special resolution authorising litigation against Orion-One | |
| Orion-One in members’ voluntary liquidation | |
| MCST commenced this action | |
| Trial began | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Orion-One breached the SPAs by failing to construct the building in a good and workmanlike manner.
- Category: Substantive
- Sub-Issues:
- Defective workmanship
- Use of substandard materials
- Failure to construct in a good and workmanlike manner
- Related Cases:
- [2005] 2 SLR(R) 613
- [2016] 4 SLR 351
- Negligence
- Outcome: The court found that Sanchoon owed a duty of care to the MCST and breached that duty through negligent construction.
- Category: Substantive
- Sub-Issues:
- Duty of care
- Breach of duty of care
- Causation
- Damages
- Related Cases:
- [1995] 3 SLR(R) 653
- Locus Standi
- Outcome: The court determined that the MCST had the requisite locus standi to bring its claim against Orion-One for 186 subsidiary proprietors.
- Category: Procedural
- Sub-Issues:
- Authority to represent subsidiary proprietors
- Admissibility of letters of authorization
- Compliance with Building Maintenance and Strata Management Act
- Related Cases:
- [2016] 4 SLR 351
- [2005] 2 SLR(R) 613
- Admissibility of Evidence
- Outcome: The court ruled on the admissibility of letters of authorization and affidavits of evidence in chief, addressing issues of hearsay and compliance with procedural rules.
- Category: Procedural
- Sub-Issues:
- Hearsay
- Letters of Authorization
- Affidavits of Evidence in Chief
- Related Cases:
- [1994] 3 SLR(R) 1013
- [2015] 5 SLR 1322
- [2006] 3 SLR(R) 769
8. Remedies Sought
- Monetary Damages
- Compensation for rectification costs
9. Cause of Actions
- Breach of Contract
- Negligence
- Breach of Warranty
10. Practice Areas
- Construction Defect Litigation
- Commercial Litigation
11. Industries
- Construction
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Management Corporation Strata Title Plan No 3322 v Mer Vue Developments Pte Ltd | N/A | Yes | [2016] 4 SLR 351 | Singapore | Cited for the principle that a management corporation must identify the specific subsidiary proprietors whom it claims to represent in the action by naming them individually in an annex to its statement of claim. |
| Management Corporation Strata Title Plan No 2297 v Seasons Park Ltd | N/A | Yes | [2005] 2 SLR(R) 613 | Singapore | Cited for the principle that a management corporation must identify the specific subsidiary proprietors whom it claims to represent in the action by naming them individually in an annex to its statement of claim. |
| Saga Foodstuffs Manufacturing (Pte) Ltd v Best Food Pte Ltd | N/A | Yes | [1994] 3 SLR(R) 1013 | Singapore | Cited for the principle that evidence which is adduced to prove that an out-of-court statement was made (and not to prove the truth of the contents of that statement) is not within the hearsay rule. |
| Bumi Geo Engineering Pte Ltd v Civil Tech Pte Ltd | N/A | Yes | [2015] 5 SLR 1322 | Singapore | Cited for the principle that a statement must have been made in the course of transactions performed in one’s habitual relation with others and as a material part of one’s mode of obtaining a livelihood to fall within the exception to the rule against hearsay which is set out in s 32(1)(b)(iv) of the Evidence Act. |
| Jet Holding Ltd and others v Cooper Cameron (Singapore) Pte Ltd and another and other appeals | N/A | Yes | [2006] 3 SLR(R) 769 | Singapore | Cited for the principle that agreement to include a document in an agreed bundle is an agreement only to dispense with formal proof of the document (ie, proof of the document by primary or permissible secondary evidence) and not agreement as to the truth of the contents of the document. |
| Cropper v Smith | N/A | Yes | (1884) 26 Ch D 700 | N/A | Cited for the principle that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice. |
| Wee Soon Kim Anthony v UBS AG | N/A | Yes | [2003] 2 SLR(R) 554 | Singapore | Cited for concerns about the effect of allowing a party to reopen its case on the judicial goal of disposing of civil litigation justly and expeditiously. |
| Browne v Dunn | N/A | Yes | (1893) 6 RJ 67 | N/A | Cited for the principle that the rule in Browne v Dunn is not a rigid, technical rule and is ultimately a rule of fairness to the witness. |
| Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another appeal | N/A | Yes | [2011] 3 SLR 540 | Singapore | Cited for the principle that an agent cannot give himself authority. |
| Goh Teh Lee v Lim Li Pheng Maria and others | N/A | Yes | [2010] 3 SLR 364 | Singapore | Cited for the principle that the definition of “subsidiary proprietor” in the LTSA does not include a single tenant in common. |
| Management Corporation Strata Title Plan No 3322 v Mer Vue Developments Pte Ltd and others (King Wan Construction Pte Ltd and others, third parties) | High Court | Yes | [2016] SGHC 28 | Singapore | Cited for the principle that a management corporation must obtain authorisation from its subsidiary proprietors before commencing action on behalf of that subsidiary proprietor. |
| Royal British Bank v Turquand | N/A | Yes | [1843-60] All ER Rep 435 | N/A | Cited for the principle of the “indoor management rule”. |
| Chan Siew Lee v TYC Investment Pte Ltd and others and another appeal | N/A | Yes | [2015] 5 SLR 409 | Singapore | Cited for the principle that the decision to bring an action in the name of a company falls within the purview of the company’s board of directors. |
| Fung Yuk Lien v Foong Chee Sam (as administrator of the estate of Kong Muk Tei, deceased) | N/A | Yes | [2000] 3 MLJ 543 | N/A | Cited for the principle that affidavits of evidence in chief do not comply with O 41 r 1(7) and (8) and Form 78 of Appendix A of the Rules and should therefore be rejected. |
| Vellama d/o Marie Muthu v Attorney-General | N/A | Yes | [2013] 4 SLR 1 | Singapore | Cited for the principle that locus standi can be reassessed at any time before the court reaches a final determination. |
| RSP Architects Planners & Engineers v Ocean Front Pte Ltd and another appeal | N/A | Yes | [1995] 3 SLR(R) 653 | Singapore | Cited for the principle that a management corporation may bring claims in tort in respect of defects in common property pursuant to s 24(2)(b) of the BMSMA. |
| Sit Kwong Lam v Management Corporation Strata Title Plan No 2645 | N/A | Yes | [2018] 1 SLR 790 | Singapore | Cited for the principle that the two requirements of s 2(1) of the BMSMA are to be read conjunctively. |
| Animal Concerns Research & Education Society v Tan Boon Kwee | N/A | Yes | [2011] 2 SLR 146 | Singapore | Cited for the principle that it is possible for there to be concurrent liability in both contract and tort. |
| Robinson v P E Jones (Contractors) Ltd | N/A | No | [2011] EWCA Civ 9 | England and Wales | Sanchoon relied on this case to submit that its duty of care should only extend to defects which pose a risk to health or safety. |
| Management Corporation Strata Title Plan No 3322 v Tiong Aik Construction Pte Ltd and another | N/A | No | [2016] 4 SLR 521 | Singapore | Sanchoon relied on this case to submit that its duty of care should only extend to defects which pose a risk to health or safety. |
| Lian Kok Hong v Ow Wah Foong and another | N/A | Yes | [2008] 4 SLR(R) 165 | Singapore | Cited for the principle that it is a hardship to a defendant to have a cause of action hanging over him, like the sword of Damocles, for an indefinite period. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) | Singapore |
| Land Titles (Strata) Act (Cap 158, 2009 Rev Ed) | Singapore |
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
| Sale of Commercial Properties Rules 1999 | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Partnership Act (Cap 391, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Defect
- Common Property
- Subsidiary Proprietor
- Letter of Authorization
- Good and Workmanlike Manner
- Warranty
- Locus Standi
- Strata Title Plan
- Sale and Purchase Agreement
- Negligence
- Duty of Care
15.2 Keywords
- Construction Defects
- Negligence
- Breach of Contract
- Strata Title
- Building Maintenance
- Letters of Authorization
- Locus Standi
17. Areas of Law
16. Subjects
- Building and Construction Law
- Strata Management
- Contract Law
- Tort Law
- Civil Procedure