SYT Consultants v QBE Insurance: Professional Indemnity & Breach of Duty Claims

SYT Consultants Pte Ltd, an engineering firm, sued QBE Insurance (Singapore) Pte Ltd in the General Division of the High Court of Singapore, seeking to recover $2 million under a professional indemnity insurance policy. The claim arose from a consent judgment entered against SYT Consultants in favor of Link (THM) Prestige Homes Pte Ltd and Exclusive Design Construction Pte Ltd for breach of contract and negligence related to a construction project. QBE Insurance denied coverage, alleging that SYT Consultants had not met the policy's threshold conditions and had breached policy conditions by acting dishonestly and failing to cooperate. Justice Kwek Mean Luck dismissed SYT Consultants' claim, finding that the policy did not cover the liability under the consent judgment because SYT Consultants failed to prove that the settlement agreement was reasonable.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Claim Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Engineering firm SYT Consultants sues QBE Insurance to recover $2M from a consent judgment. The court denied the claim, finding SYT liable.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
SYT Consultants Pte LtdPlaintiffCorporationClaim DismissedLostEu Hai Meng, Alicia Chia Si Min
QBE Insurance (Singapore) Pte LtdDefendantCorporationJudgment for DefendantWonRamesh s/o Selvaraj, Daniel Seow Wei Jin, Jonathan Kenric Trachsel

3. Judges

Judge NameTitleDelivered Judgment
Kwek Mean LuckJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Eu Hai MengCivic Legal LLC
Alicia Chia Si MinCivic Legal LLC
Ramesh s/o SelvarajAllen & Gledhill LLP
Daniel Seow Wei JinAllen & Gledhill LLP
Jonathan Kenric TrachselAllen & Gledhill LLP

4. Facts

  1. SYT Consultants was engaged to prepare documents for Earth Retaining or Stabilizing Structures (ERSS).
  2. Ng Dick Young was appointed the Qualified Person (QP) for the ERSS works.
  3. Damage was caused to two neighboring properties during the construction project.
  4. The owners of the properties brought claims against the Builder and the Developer.
  5. The Developer and the Builder reached settlement agreements with the owners.
  6. SYT Consultants and Ng Dick Young entered into a consent judgment to pay $3,010,264.53.
  7. QBE Insurance denied coverage under the professional indemnity insurance policy.

5. Formal Citations

  1. SYT Consultants Pte Ltd v QBE Insurance (Singapore) Pte Ltd, Suit No 376 of 2021, [2022] SGHC 251

6. Timeline

DateEvent
First Annex C Form dated
Plaintiff received a letter alleging breach of contractual duties and/or negligence
Defendant first informed of a potential claim by the plaintiff
DRD requested Mr. Ng to provide the date when a certain figure in the plaintiff’s 6 October 2015 Annex E covering letter was taken
DRD asked whether Mr. Ng was involved in the decisions to, (i) put up the props; and (ii) remove the props thereafter
Meeting between Mr. Ng, the defendant and DRD
DRD sent a query to Mr. Ng on the sequence of works with reference to a site photograph
DRD pointed out a document contradicting Mr Ng’s account
DRD sent two e-mails to Mr. Ng to follow up on her earlier e-mails of 26 June 2018
Mr. Patterson-Kane provided the defendant with a report
Mr. Patterson-Kane provided the defendant with a report
Defendant wrote to the plaintiff to communicate its decision to deny coverage under the Policy
Developer and the Builder commenced a suit against the plaintiff and Mr Ng
Further submissions to BCA for the omission of the installation of raking struts, which were approved
Defendant was brought in as a third party to Suit 417
Parties in Suit 417 took part in a mediation
Settlement Agreement had only been signed by Mr Ng and had not been signed by the other parties
Plaintiff and Mr Ng entered into a consent judgment
Mr Patterson-Kane provided an Expert Report on Damage to 1 & 3 Greenleaf Lane
Trial began
Trial
Hearing date
Hearing date
Hearing date
Judgment reserved

7. Legal Issues

  1. Coverage under Professional Indemnity Insurance Policy
    • Outcome: The court held that the policy did not cover the plaintiff's liability under the consent judgment because the plaintiff failed to prove that the settlement agreement was reasonable.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of policy clauses
      • Reasonableness of settlement agreement
      • Requirement of actual vs. arguable tortious liability
  2. Breach of Policy Exclusion for Dishonest Acts or Wilful Breach of Duty
    • Outcome: The court held that the defendant had not proved that Mr. Ng was dishonest or in wilful breach of duty in failing to indicate the deviation from the approved ERSS plans, and accordingly, cl 6.5 was not breached.
    • Category: Substantive
    • Sub-Issues:
      • Definition of dishonesty
      • Definition of wilful breach of duty
      • Failure to report deviations from approved plans
  3. Breach of Policy Condition for Cooperation
    • Outcome: The court held that the plaintiff had breached cl 7.7 by failing to provide all the information and assistance that the defendant may have reasonably required to investigate and/or defend the claim, but that cl 7.7 was not a condition precedent.
    • Category: Procedural
    • Sub-Issues:
      • Failure to provide information and assistance
      • Condition precedent to coverage
  4. Public Policy Considerations in Contractual Interpretation
    • Outcome: The court held that there was no legal basis for the plaintiff's submission that the court should determine the suit based on public policy considerations despite the proper interpretation of the contract leading to the opposite outcome.
    • Category: Jurisdictional
    • Sub-Issues:
      • Enforcement of contracts contrary to contractual interpretation
      • Reliance on public policy grounds

8. Remedies Sought

  1. Monetary Damages
  2. Indemnity under Insurance Policy

9. Cause of Actions

  • Breach of Contract
  • Negligence
  • Claim for Indemnity under Insurance Policy

10. Practice Areas

  • Insurance Litigation
  • Construction Litigation
  • Professional Negligence

11. Industries

  • Construction
  • Insurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
MK (Project Management) Ltd v Baker Marine Energy Pte LtdCourt of AppealYes[1994] 3 SLR(R) 823SingaporeCited for the principle that pleadings need only contain material facts, not legal results.
In re Vandervell’s Trusts (No 2); White v Vandervell Trustees LtdN/AYes[1974] Ch 269N/ACited for the principle that pleadings need only contain material facts, not legal results.
Sharikat Logistics Pte Ltd v Ong Boon Chuan and othersHigh CourtYes[2011] SGHC 196SingaporeCited for the principle that a Statement of Claim must set out material facts, not opinion, and not evidence.
Enterprise Oil Ltd v Strand Insurance Co LtdHigh Court of JusticeYes[2006] EWHC 58 (Comm)England and WalesCited to support the submission that the plaintiff must establish that it would have been liable to the Builder and Developer in Suit 417 for at least the amount of the Settlement Agreement.
Britestone Pte Ltd v Smith & Associates Far East, LtdCourt of AppealYes[2007] 4 SLR(R) 855SingaporeCited for the principles governing whether a settlement agreement is reasonable.
Hartford Insurance Co (Singapore) Ltd (formerly known as The People’s Insurance Co Ltd) v Chiu Teng Construction Pte LtdCourt of AppealYes[2002] 1 SLR(R) 152SingaporeCited to determine whether the fact that the plaintiff had obtained the Consent Judgment was itself sufficient to entitle it to coverage under the Policy.
Griffin Travel Pte Ltd v Nagender Rao Chilkuri and othersHigh CourtYes[2014] SGHC 205SingaporeCited for the meaning of “dishonesty”.
Marina Centre Holdings Pte Ltd v Pars Carpet Gallery Pte LtdN/AYes[1997] 2 SLR(R) 897SingaporeCited for the meaning of “wilfulness”.
AIC Ltd v ITS Testing Services (UK) Ltd (The “Kriti Palm”)N/AYes[2007] 1 Lloyd's Rep 555England and WalesCited for the definition of knowledge in an action of deceit.
Armstong v StrainN/AYes[1951] 1 TLR 856N/ACited for the definition of knowledge in an action of deceit.
Yong Kheng Leong and another v Panweld Trading Pte Ltd and anotherN/AYes[2013] 1 SLR 173SingaporeCited for the test for dishonesty.
Twinsectra Ltd v Yardley and othersN/AYes[2002] 2 AC 164N/ACited for the test for dishonesty.
Shinedean Ltd v Alldown Demolition (London) Ltd (in liquidation) and anotherN/AYes[2006] 1 WLR 2696England and WalesCited for the principle that a co-operation clause involving an obligation to render “all necessary information and assistance to enable the [insurer] to settle or resist any claim or to institute proceedings” was held to be a condition of indemnification under the policy.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appealN/AYes[2007] 4 SLR(R) 413SingaporeCited for the principle that a condition precedent goes to the root of the Policy contract.
Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) LtdN/AYes[2016] 1 SLR 1069SingaporeCited for the principle that the starting point in contractual interpretation is to look to the text of the contractual document.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdN/AYes[2008] 3 SLR(R) 1029SingaporeCited for the principle that the court may have regard to the relevant context as long as the relevant contextual points are clear, obvious and known to both parties.
Diab v Regent Insurance Co LtdN/AYes[2007] 1 Bus LR 915N/ACited for the substantive rationale for co-operation clauses when determining if they were conditions precedent.
Denso Manufacturing UK Ltd v Great Lakes Reinsurance (UK) plcN/AYes[2018] 4 WLR 93N/ACited for the substantive rationale for co-operation clauses when determining if they were conditions precedent.
The Directors of the London Guarantee Co v Benjamin Lister FearnleyN/AYes(1880) 5 App Cas 911N/ACited for Lord Blackburn’s discussion of the rationale of a proviso (at 916-917) when determining whether it was a condition precedent.
Ting Siew May v Boon Lay Choo and anotherN/AYes[2014] 3 SLR 609SingaporeCited for the proposition that a court may hold that a particular contract is void and unenforceable as being contrary to public policy because of the wider public interest.
ACB v Thomson Medical Pte Ltd and othersN/AYes[2017] 1 SLR 918SingaporeCited for the proposition that public policy has a role to play in regulating the types of damages recoverable in a civil claim.
UKM v Attorney-GeneralN/AYes[2019] 3 SLR 874SingaporeCited for remarks made by the court about how public policy should be taken into account where there was a statutory basis for the court to take public policy into account.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building Control Act 1989 (2020 Rev Ed)Singapore
Adoption of Children Act (Cap 4, 2012 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Professional Indemnity Insurance
  • Earth Retaining or Stabilizing Structures (ERSS)
  • Qualified Person (QP)
  • Consent Judgment
  • Settlement Agreement
  • Breach of Professional Duty
  • Civil Liability
  • Conditions Precedent
  • Dishonest Omission
  • Wilful Breach of Duty

15.2 Keywords

  • insurance
  • construction
  • professional indemnity
  • negligence
  • breach of contract
  • settlement
  • consent judgment

16. Subjects

  • Insurance
  • Construction
  • Professional Liability

17. Areas of Law

  • Insurance Law
  • Liability insurance
  • Professional indemnity
  • Building and Construction Law
  • Architects, engineers and surveyors
  • Duties and liabilities