Goh Sin Huat Electrical Pte Ltd v Ho See Jui (trading as Xuanhua Art Gallery) and another

V K Rajah JA (delivering the grounds of decision of the court):

[1] This appeal arose from the following undisputed facts. A water inlet hose (“the Water Inlet Hose”) which carried water to a water dispensing unit (“WDU”) located at the office of the second respondent, Liquid Advertising Pte Ltd (“Liquid Advertising”) ruptured. This resulted in water seepage into an art gallery situated directly below. The art gallery was owned and operated by the first respondent, Ho See Jui trading as Xuanhua Art Gallery (“Ho See Jui”). The water seepage extensively damaged the paintings displayed and stored in Ho See Jui’s Xuanhua Art Gallery (“the Art Gallery”). The WDU was supplied, installed and maintained by the appellant, Goh Sin Huat Electrical Pte Ltd. Ho See Jui commenced these proceedings against Liquid Advertising and the appellant in order to recover monies for the loss and damage sustained as a result of the water leakage from the rupture of the Water Inlet Hose. Both the trial and this appeal solely concerned the question of liability. Accordingly, evidence as to the quantum of damages suffered by Ho See Jui was not adduced.

[4] Ho See Jui, the plaintiff and the first respondent in this appeal, is in the business of exhibiting and selling contemporary Chinese ink paintings which are traditionally painted on rice paper.

[5] Liquid Advertising, the first defendant and second respondent in this appeal was at all material times the tenant of 70A Bussorah Street (“the Second Floor Unit”).

[6] The appellant, the second defendant, was at all material times the sole local distributor of the “Frigeria” brand of WDUs, one of which was installed in the Second Floor Unit. The appellant was also responsible for repairing and maintaining the said WDU.

[7] Ho See Jui was the tenant of the ground floor of a two-storey shophouse located at 70 Bussorah Street, Singapore 199483. Ho See Jui owned and operated the Art Gallery in the leased space where he displayed his traditional rice paper paintings. The Second Floor Unit which was leased by Liquid Advertising was located directly above the Art Gallery. On or about 2 April 2001, the appellant sold Liquid Advertising a “Frigeria” brand of WDU which was initially installed in Liquid Advertising’s previous office, located at 770A North Bridge Road, Singapore 198738.

[8] On 2 September 2004, acting on Liquid Advertising’s request the appellant re-installed the WDU in the Second Floor Unit. In the course of the reinstallation of the WDU, the appellant also supplied a water inlet hose connecting the water mains in the Second Floor Unit to the WDU. For ease of reference, the area where the WDU was installed will henceforth be referred to as the “WDU Area”. It was common ground that the Water Inlet Hose carrying water to the WDU ruptured sometime between the evening of 24 September 2008 and the early morning of 25 September 2008. The water that leaked from the ruptured Water Inlet Hose seeped through the flooring of the Second Floor Unit into the Art Gallery. Ho See Jui alleged that the water that seeped into the Art Gallery damaged his paintings and the cabinet storing his paintings – this damage formed the basis of his action against Liquid Advertising and the appellant.

[9] On 28 August 2004, shortly before relocating to the Second Floor Unit, Liquid Advertising entered into an agreement with the appellant for the latter to re-install the WDU at the new premises (“the Reinstallation Agreement”). A quotation issued for the installation (“the Quotation”) contained the following clause (“the Quotation Warning”):

We should add that it was not disputed that the WDU Area had timber flooring which could allow water to pass through its cracks.

[10] Liquid Advertising also entered into service and maintenance contracts with the appellant in August 2001 (“the First Maintenance Contract”), on 11 December 2003 (“the Second Maintenance Contract”) and on 22 June 2005 (“the Third Maintenance Contract”) (collectively, “the Maintenance Contracts”). Pursuant to the First Maintenance Contract, the appellant maintained and serviced the WDU on four separate occasions between September 2001 and November 2002. The Third Maintenance Contract, valid from 22 June 2005 to 21 June 2007, stated that the WDU was to be serviced a total of eight times. In all, the WDU was serviced on 16 occasions. The last service was conducted on 16 September 2008, eight to nine days before the rupture of the Water Inlet Hose.

[11] Though not in the First Maintenance Contract, the Second and Third Maintenance Contracts contained the following clause (“the Disclaimer”):

The Disclaimer was also inserted in the appellant’s service orders which were issued for services carried out under the Maintenance Contracts, and in the service order issued for the reinstallation of the WDU at the Second Floor Unit.

[12] Ho See Jui raised three causes of action against Liquid Advertising in his claim for general and special damages. He successfully maintained claims in the tort of negligence, in the tort of private nuisance and under the rule in John Rylands and Jehu Horrocks v Thomas Fletcher (1868) LR 3 HL 330 (“Rylands v Fletcher”). Ho See Jui also pleaded two causes of action against the appellant; one in the tort of negligence and another in the tort of private nuisance. Specifically, Ho See Jui alleged that the appellant was negligent in:

(a) installing the Water Inlet Hose which was inherently unsuitable for the carriage of potable water and/or for use with the WDU; and

(b) providing and/or installing the Water Inlet Hose without ascertaining whether the Water Inlet Hose was suitable for use with the WDU.

The appellant denied that it owed a duty of care to Ho See Jui or that it breached that duty for the following reasons:

(a) the appellant did not know that the carpeted flooring at the WDU Area was made of timber and that the WDU Area was located directly above Ho See Jui’s cabinet containing some of his paintings;

(b) the appellant was not responsible for the location where the WDU was installed;

(c) the appellant did not install the Water Inlet Hose; and

(d) the appellant additionally claimed that the Water Inlet Hose appeared to have been deliberately cut.

Further, as with his claim against Liquid Advertising, Ho See Jui alleged that the appellant had created a nuisance by installing the WDU at an inappropriate location.

[13] On 8 December 2010, Liquid Advertising served a notice claiming contribution or indemnity against the appellant for any losses attributable to it from Ho See Jui’s claim. Liquid Advertising claimed that it was entitled to an indemnity or contribution because the appellant had breached various implied terms of the Reinstallation Agreement and the Maintenance Contracts in two aspects:

(a) first, Liquid Advertising took the position that the Water Inlet Hose was of an unsatisfactory quality and/or was not reasonably fit for its intended purpose; and

(b) second, Liquid Advertising claimed that the appellant did not perform its obligations under the Reinstallation Agreement and the Maintenance Contracts with reasonable care and skill, or at all.

[14] The main arguments raised by the appellant in response to Liquid Advertising’s claim for an indemnity or contribution were as follows:

(a) first, the Maintenance Contracts expired before 24 September 2008 or the date of rupture of the Water Inlet Hose;

(b) second, under the terms of the Third Maintenance Agreement, the appellant did not take responsibility for the location of the WDU. Further, the appellant’s duties only concerned the WDU itself and not the Water Inlet Hose;

(c) third, the terms that Liquid Advertising claimed were implied into the Reinstallation Agreement and the Third Maintenance Agreement were not so implied because the Water Inlet Hose was not installed by the appellant; and

(d) fourth, and in the alternative, the appellant was entitled to rely on the Quotation Warning and the Disclaimer.

[15] The Judge held that the Water Inlet Hose ruptured due to (a) hydrolysis and (b) a pre-existing fabrication defect in the form of two helical seam lines (“the Helical Line Feature”). The Judge found that the Helical Line Feature would not have had any impact on the use of the Water Inlet Hose if it had been used for its intended purpose of carrying compressed air. The Judge also accepted expert opinions that the Water Inlet Hose was not suitable for use with the WDU on the basis of an industry standard for the types of hoses approved for the carriage of water. The three causes identified for the rupture were:

(a) first, the hydrolytic degradation of the Water Inlet Hose;

(b) second, the Helical Line Feature; and

(c) third, the location of the WDU at the WDU Area because the flooring of the WDU Area was water permeable.

[16] Rejecting the appellant’s argument that the Water Inlet Hose was not installed by them, the Judge found that on the balance of probabilities the evidence suggested that the Water Inlet Hose must have been the water inlet hose that was installed by the appellant on 2 September 2004.

[17] As noted above, the Judge found that Liquid Advertising was liable to Ho See Jui for all three causes of action in the tort of negligence, private nuisance and the rule under Rylands v Fletcher. The sole reason identified by the Judge as underscoring Liquid Advertising’s liability was the fact that they instructed the appellant to install the WDU at the WDU Area (ie, the third cause stated above at [15]) despite the Quotation Warning (above at [9]), the Disclaimer and warnings in the service orders (above at [10]–[11]). Liquid Advertising did not appeal against any of the Judge’s findings.

[18] On the other hand, the appellant was only found to be liable to Ho See Jui for having committed the tort of private nuisance. The Judge reasoned that the appellant was responsible for installing the Water Inlet Hose which was unsuitable for the carriage of water and for ignoring its own warnings that the WDU should have been installed at the wet pantry area. Unlike Liquid Advertising, the appellant was held to be responsible for all three causes which were identified by the Judge (above at [15]). As for Ho See Jui’s claim against the appellant in negligence, the Judge held that she was not satisfied that the appellant owed Ho See Jui a duty of care. Accordingly, no finding was made in relation to this claim.

[19] Having found Liquid Advertising to be liable under all three causes of action and the appellant in the tort of private nuisance, the Judge found that Ho See Jui was entitled to a joint judgment as the acts of either defendant could not be attributed to distinct portions of the damage suffered by Ho See Jui. As noted above, the damage was identified to have been caused by a combination of three causes, viz, the Helical Line Feature, hydrolytic degradation of the Water Inlet Hose and the location of the WDU at the WDU Area. By reason of Liquid Advertising’s limited responsibility only in relation to the location of the WDU, the Judge found that a just and equitable apportionment was 30% liability to Liquid Advertising and 70% liability to the appellant.

[20] The Judge also found that Liquid Advertising was entitled to an indemnity from the appellant by reason of breaches of implied conditions under the Reinstallation Agreement, implied under s 4(2) of the Supply of Goods Act (Cap 394, 1999 Rev Ed) (“the SGA”). First, s 4(2) of the SGA implied that the goods supplied under the contract were of “satisfactory quality”. Second, s 4(2A) of the SGA provided for an objective test for determining whether the goods were of satisfactory quality:

The Judge held that the Water Inlet Hose that the appellant had supplied was unsatisfactory because a reasonable person would consider that a hose meant to carry water should not be made of a material prone to hydrolytic degradation. The implied condition that goods supplied by the appellant are to be of satisfactory quality was breached for the same reason. Accordingly, the appellant was ordered to indemnify Liquid Advertising’s proportion of liability owed to Ho See Jui.

[21] The appellant took issue with the Judge’s (a) findings of fact, (b) the apportionment of liability and (c) the order to indemnify Liquid Advertising.

[22] The following grounds of appeal were raised against the two primary findings of fact identified as relevant to the appellant’s liability under the tort of private nuisance:

(a) Whether it was the appellant who had installed the Water Inlet Hose: specifically, the appellant argued that the Judge failed to give due weight to the evidence of all three expert witnesses which strongly suggested that the Water Inlet Hose could not have been the same water inlet hose that had been installed by the Appellant four years earlier in 2004.

(b) Whether the appellant was responsible for the location of the WDU at the WDU Area: the appellant argued that the Judge failed to give due weight to the appellant’s provision of numerous warnings to Liquid Advertising which clearly stated that the WDU should have been installed at a wet pantry area and that the appellant would not be responsible for any leakage. In essence, the appellant argued that the Judge should have placed greater weight on Liquid Advertising’s unilateral and independent decision to install the WDU at the WDU Area.

[23] In the alternative, on the issue of apportionment of liability between Liquid Advertising and the appellant, the following grounds of appeal were raised:

(a) that the Judge failed to give due weight to the fact that Liquid Advertising had been provided with numerous warnings by the appellant that the WDU should have been installed at a wet pantry area; and

(b) that the learned Judge completely failed to consider the unchallenged evidence before the Court that locating the WDU at the wet pantry area would have prevented most, if not all, of the water that had leaked from the Water Inlet Hose from flowing to the Art Gallery; as most of the leaked water would have been drained away.

[24] Finally, on the issue of indemnity, the appellant made the following submissions:

(a) the Judge completely failed to give consideration to her other holding that Liquid Advertising itself had been negligent in instructing that the WDU be located at the WDU Area and not the wet pantry area; and

(b) the Judge fell into error by failing to take Liquid Advertising’s contributory negligence into account when deciding on the extent, if any, to which the appellant was obliged to indemnify Liquid Advertising.

[25] Broadly speaking, the appellant raised three grounds of appeal which will be addressed in the following order:

(a) whether the findings of fact made by the Judge in support of the appellant’s liability in the tort of private nuisance were supported by the weight of the evidence before the Court (below at [26]–[47]);

(b) whether the Judge erred in the apportionment of liability (below at [48]–[58]); and

(c) whether the Judge erred in ordering the appellant to completely indemnify Liquid Advertising (below at [59]–[63]).

Issue 1: Whether the findings of fact made by the Judge in support of the appellant’s liability in the tort of private nuisance were supported by the weight of the evidence before the Court

[26] The appellant placed great weight on certain excerpts from the expert evidence before the Judge relating to the condition of the Water Inlet Hose. The Water Inlet Hose was described as follows: “it was very new”; and that it “would appear likely that the pipe was very recently installed”. By reason of the alleged “pristine state” of the hose, the appellant argued that the Water Inlet Hose could not have been the same hose that was installed by the appellant four years prior to the incident. Secondly, the appellant postulated that based on the expert evidence before the Court, the hydrolytic degradation would have caused any water inlet hose similar to the Water Inlet Hose to have ruptured within weeks or months of being exposed to water. Thus it was clear that the Water Inlet Hose could not have been the same water inlet hose that had been installed by the appellant in September 2004. In summary, the appellant sought to establish that the Water Inlet Hose was not installed by them because (a) it looked too new to be four years old, and (b) because if it indeed was installed in 2004, by reason of the process of hydrolytic degradation, it would have ruptured within weeks or months of exposure to water.

[27] Our appraisal of the expert opinion relied on by the appellant revealed that the high threshold for appellate review of a finding of fact was not met as the expert evidence did not clearly indicate either (a) or (b) (above at [26]). Even if it were accepted that there were gaps in the evidence, and the appellant was right that the Water Inlet Hose was replaced after 2004, on a balance of probabilities, this replacement was likely to have been performed by the appellant. Why would Liquid Advertising have chosen to replace the water inlet hose itself or engaged some other party to do so when it had an existing maintenance arrangement with the appellant (see [36]–[41] below)? With that general preface we turn to examining this argument more closely.

[28] Liquid Advertising’s witness, Mr Graham Alan Cooper (“Mr Cooper”) had prior experience as a materials scientist specialising in failure analysis and failure investigation for more than 25 years. The appellant heavily relied on the reproduced portion of Mr Cooper’s report (“the preliminary report”) which was based on a preliminary, non-destructive inspection of the Water Inlet Hose on or about 20 October 2008 (less than a month after its rupture on 25 September 2008). It was carried out on the instructions of Liquid Advertising’s loss adjusters, Cunningham Lindsay (Singapore) Pte Ltd. Mr Cooper observed as follows:

[29] The weight to be given to Mr Cooper’s opinion must be determined keeping in mind that this report was preliminary. Further, Mr Cooper only carried out a non-destructive inspection of the Water Inlet Hose and the inspection was only a visual one which did not involve any detailed analysis of the same. Liquid Advertising argued that the purpose of Mr Cooper’s report was for him to assess whether the damage had been caused externally or whether there was a defect with the Water Inlet Hose. After having examined the Water Inlet Hose in greater detail, Mr Cooper found that there were no markings on it which identified the date of its manufacture.

[30] In his subsequent expert report, Mr Cooper clarified his views in relation to the appearance of the Water Inlet Hose. In Mr Cooper’s expert report dated 4 October 2010, he reiterated that when he had conducted the examination of the Water Inlet Hose in October 2008, the Water Inlet Hose was in very good condition:

However, Mr Cooper also stated as follows:

[31] The Water Inlet Hose was installed in an enclosed office area, outside of the wet pantry area which was used for spraying adhesives in the course of Liquid Advertising’s business. It was not exposed to sunlight or adhesives. The appearance alone of the hose, documented in a preliminary report did not establish, on a balance of probabilities, that it was new. Mr Cooper’s evidence was interpreted by the Judge in support of her findings; it was reasonably plausible that in the conditions in which the Water Inlet Hose was stored, it remained looking new despite its age and installation in 2004. Thus the appellant’s submission was not borne out by Mr Cooper’s preliminary view alone.

[32] Ho See Jui’s witness at the trial below, Liam Kok Chye (“Mr Liam”) had relevant experience in failure and material analysis of polymers and plastics. The appellant relied on para 5.2(d) of Mr Liam’s expert report, wherein he stated as follows:

On a plain reading, this excerpt from Mr Liam’s evidence did not lend any support to the appellant’s argument. In our view, Mr Liam was merely confirming the likelihood that the Water Inlet Hose was the hose which was “reportedly replaced” in 2004 as it could not have been the same tube as was installed when the WDU was installed eight years earlier. In other words, when the WDU was re-installed in the Second Floor Unit, the Water Inlet Hose was replaced. Accordingly, on the first issue of the “new appearance” of the Water Inlet Hose, one possible explanation as suggested by Mr Cooper was the clean environment that it was stored in. At the end of the day, it appeared plain to us that the evidence relied upon by the appellant did not establish that the finding of fact made by the Judge (ie, that the Water Inlet Hose was installed by the appellant in 2004) was plainly wrong or unjustified.

[33] Secondly, the appellant also relied on the argument that the Water Inlet Hose could not have been the same one which was installed in 2004 as, by reason of the speed of hydrolytic degradation, it would not have remained intact for four years. The appellant relied on Mr Liam’s evidence in support of this proposition. In his expert report, Mr Liam noted that the Water Inlet Hose, being made of polyester, was susceptible to degradation on prolonged contact with water and was thus inappropriate for use in potable water systems like the WDU. Mr Liam also clarified that the degradation of the Water Inlet Hose due to exposure to water would have taken place within a few weeks or months:

[34] On the one hand, the appellant argued that it was significant that when directly queried by the Judge if the degradation of the Water Inlet Hose would have taken place over a period of years, Mr Liam’s response was that the degradation would have occurred within weeks or months. Liquid Advertising, on the other hand, interpreted Mr Liam’s evidence as indicating that his comments in relation to the time frame of “months or weeks” related to the time before degradation set in and the chemical attack took place rather than how long it would have taken from the time the Water Inlet Hose came into contact with water to the time it ruptured. Unfortunately, the precise time likely to have been taken from the installation of the Water Inlet Hose to its rupture was not extensively investigated in any of the expert reports.

[35] In light of the unsatisfactory nature of the evidence, leaving aside the question of degradation for a moment, on the evidence before this Court, even if the water inlet hose installed in 2004 had indeed been replaced, we were of the view that on the balance of probabilities it was replaced by the appellant (below at [36]–[41]). Thus the arguments raised by the appellant seeking to establish that the Water Inlet Hose was not installed by them were effectively neutralised. The objective evidence supported the finding that any subsequent replacement of the water inlet hose was, on a balance of probabilities, performed by the appellant.

[36] It was not disputed that a water inlet hose had been installed by the appellant in September 2004. The issue really was whether an independent third party or perhaps even Liquid Advertising had installed a replacement in the four years between 2004 and the date of rupture. We found the likelihood of Liquid Advertising choosing to replace the water inlet hose on its own accord to be highly unlikely. The replacement of the water inlet hose would have involved the following steps which were both time consuming and required expertise on the part of the individual servicing the equipment:

(a) measuring the length of the water inlet hose to be replaced;

(b) removing the same from the back of the WDU and the filter;

(c) passing it through a hole in the door frame;

(d) attaching the new water inlet hose to the water filter;

(e) passing the same through the hole in the door frame; and

(f) attaching the other end to the back of the WDU.

Thus, Liquid Advertising was likely to have lacked the necessary expertise to replace the water inlet hose, explaining their decision to enter into three separate agreements with the appellants to service and maintain the WDU unit in the first place. In fact, as noted above (at [10]), the appellant continued to service the WDU regularly until 16 September 2008, eight to nine days before the incident.

[37] Further, upon cross-examination, the appellant’s service director, Mr Goh Chin Siew (“Mr Goh”), went so far as to state that there was no reason for the appellant to believe that any third party had serviced the WDU:

[38] It was also Mr Goh’s evidence that if there was a need to replace the Water Inlet Hose the appellant would have supplied one:

[39] Furthermore, we were inclined to agree that if a third party had provided another water inlet hose, Liquid Advertising’s employees would have had either the knowledge or a record of this. Liquid Advertising employees/ex-employees testified that the water inlet hose was installed by the appellant and/or that the appellant was the only party who had provided maintenance services for the WDU.

[40] While the appellant argued that the Water Inlet Hose could have been subsequently replaced by someone else and that other employees of Liquid Advertising who did not testify may have known of this, these arguments were speculative. It was always open to the appellant to call any witness and discover any documents that it thought would advance its case theory. Pertinently, the evidence given by Liquid Advertising’s employees who were called as witnesses was not challenged by the appellants. Further, it seemed curious that the appellant would have continued to regularly service the WDU unit without realising that a replacement had been made by a third party.

[41] Accordingly, if indeed there had been any replacement of the water inlet hose between 2004 and the date of rupture, on a balance of probabilities, on the evidence, we were satisfied that this replacement was performed by the appellant. Accordingly, there was no reason to disturb the Judge’s finding that the Water Inlet Hose was installed by the appellant.

[42] The appellant further submitted that the Judge erred in finding that the appellant was responsible for the location of the WDU for the following reasons:

(a) pursuant to a contractual arrangement between the appellant and Liquid Advertising it was Liquid Advertising and not the appellant who would be responsible for the location of the WDU; and

(b) it was Liquid Advertising’s unilateral decision that the WDU was to be installed at the WDU area.

Accordingly, the appellant took the position that it had been wrongly held responsible for the third cause of the location of the WDU in the WDU Area. As noted above at [41], as the appellant was found to have installed the Water Inlet Hose, the Judge’s findings of liability founded by the two other causes, viz, the Helical Line Feature and hydrolytic degradation remained undisturbed. On the available evidence, we found that the Judge was correct to have found the appellant responsible for the location of the WDU at the WDU Area instead of the wet pantry area for the reasons stated below.

[43] The appellant relied on the Disclaimer and Quotation Warning in the quotation and service contracts (above at [9]–[11]) which notified Liquid Advertising of the dangers of installing a WDU outside the wet pantry area. It was argued that the decision to install the WDU in the WDU Area rather than the wet pantry area was made by Liquid Advertising without reference to the appellant. The appellant suggested that Liquid Advertising wished to use the wet pantry area to carry out the spraying of adhesives on art work, which was part of its advertising business. Also, the appellant heavily relied on the fact that in his affidavit of evidence-in-chief (“AEIC”), Mr Goh explained that the above warnings had been introduced into the appellant’s contracts and service orders as the appellant had no way of controlling where the owner of a WDU may decide to install the WDU or the suitability of the placement site of the WDU. He stated as follows:

[44] It was not disputed that Liquid Advertising had instructed the appellant to install the WDU at the WDU Area. It was also not disputed that the decision on where to place the WDU had been made independently by Liquid Advertising, before it instructed the appellant to relocate the WDU. In fact, before the Judge, Mr Adrian Ng of Liquid Advertising explained that the decision to locate the WDU at the WDU Area and not the wet pantry area was a conscious decision made by Liquid Advertising. It was because of Liquid Advertising’s above-mentioned conduct that the Judge found them to have been responsible for one cause of the damage, namely the third cause, ie, the location of the WDU at the WDU Area. As a consequence of this, the Judge did not find the appellant to be solely responsible for the location of the WDU. Thus the more relevant question to be asked was whether the fact that Liquid Advertising had decided the location of the WDU absolved the appellant of any responsibility in relation to the same. The answer to this question was in the negative for the reasons given below at [45]–[47].

[45] Independent of the responsibility borne by Liquid Advertising for its instructions, the appellant also did in fact have a role in the location of the installation of the WDU. The appellant’s conduct in fact illustrated its awareness of its responsibility. Prior to the relocation and reinstallation of the WDU at the Second Floor Unit, on 23 August 2004, the appellant sent experienced workers to assess if the area where Liquid Advertising wanted to have the WDU installed was appropriate. In addition to a planned site visit, the appellant’s staff was also trained to verbally inform customers that the WDU should be installed in a wet pantry area. The appellant had given internal directions to its staff to comply with the Quotation Warning:

If indeed the appellants had taken a hands-off approach on this issue, as they alleged, it was odd that they undertook a site visit (in addition to training and service functions) in relation to the location of installation of the WDU. Furthermore, contrary to Mr Goh’s AEIC (above at [43]) under cross examination, Mr Goh accepted that the appellant could also refuse to install the WDU in an unsuitable area. This admission alone was sufficient to expose the fact that the appellant viewed itself as, at the very least, partially responsible for the location of the installation of the WDU. Mr Goh stated as follows:

Further, not only did the appellant have a right to refuse to install the WDU outside the wet pantry area but the appellant also took the view that faced with such a request, they would simply “not do it”.

[46] Given these facts it was only reasonable that the appellant bore some responsibility to Liquid Advertising as the installer and servicer of the “Frigeria” brand of WDU. The appellant would have known far better than a commercial client what constituted a “suitable area” for the installation of the WDU. On this basis alone, the appellant owed a duty to its customer to take reasonable care and skill in the installation of the WDUs. Also, Ho See Jui’s expert witness Mr Wan Fook Yong stated that when installing the WDU in a non-wet pantry area, the appellant should have installed a tray beneath the WDU with a connecting discharge pipe leading to the water trap in the wet pantry area to prevent or mitigate the damage caused by any possible leakage. Despite having knowledge of the significance of such a discharge pipe and its significance when a WDU is installed in a non-wet pantry area, the appellant failed to install such a pipe.

[47] The Judge, in our view, correctly found that the appellant was at least equally responsible for ignoring its own Quotation Warning when installing the WDU at the WDU Area. Further, from the evidence discussed above, it was clear that the appellant saw itself as responsible to some degree for the location of installation of the WDU and could have refused to install the WDU at an unsuitable area even if so instructed by a client. This evidence shone an unflattering light on the contractual agreement with Liquid Advertising as described by the appellant. Furthermore, in installing the WDU in a non-wet pantry area, the appellant should have installed a discharge tube so as to mitigate any water leakage. Accordingly, the Judge’s finding that both the appellant and Liquid Advertising were responsible for the location of the WDU was clearly supported by the weight of the evidence. Thus, the appellant’s challenge to the Judge’s finding on its liability was without merit. The question then turned to whether the Judge erred in the apportionment of liability between Liquid Advertising and the appellant as joint tortfeasors.

[48] More than 12 years ago it was held by this Court in the case of Chuang Uming (Pte) Ltd v Setron Ltd and another appeal [1999] 3 SLR(R) 771, that apportionment of liability between two defendants must be carried out in a manner that is just and equitable, having regard to the person’s responsibility for the damage in question. In TV Media Pte Ltd v De Cruz Andrea Heidi and another appeal [2004] 3 SLR(R) 543 (“TV Media”) at [159], in relation to the appeal on apportionment of damages, citing Ramoo v Gan Soo Swee [1971–1973] SLR(R) 42 at [15] and British Fame (Owners) v Macgregor (Owners) (The Macgregor) [1943] AC 197 at 201 (“The Macgregor”), this Court observed that:

[49] It is, however, clear that ‘exceptional’ circumstances as conceived by the House of Lords, includes the trial judge’s error in law and failure to apply his or her mind to a material fact bearing on the relative culpability of the parties found to be jointly liable. By way of comparison, in appeals against ordinary findings of fact, this Court in Peh Eng Leng v Pek Eng Leong [1996] 1 SLR(R) 939 at [21] had earlier adopted the approach of the House of Lords in its seminal decision in Mrs Sarah Ann Clarke v Edinburgh and District Tramways Company, Limited (1919) SC HL 35 wherein Lord Shaw of Dunfermline said (at 36):

The basis for review of findings of fact in the Singapore context has been restated in Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd [2009] 4 SLR(R) 1101 (“Tat Seng”) at [41] where this Court stated as follows:

Thus, a finding of fact is subject to appellate intervention where it is plainly wrong or unjustified by the totality of the evidence (“findings of fact test”). The “exceptional circumstances” test as articulated in The Macgregor also falls within the ambit of the findings of fact test as it is triggered when the trial judge has failed to apply his mind to a material fact or has made an order unsupported by the totality of the evidence. The question then arises as to whether there really can be said to be a separate, higher standard of appellate review for appeals concerning the apportionment of liability among two or more defendants and if so whether such a standard is defensible. A close analysis of the English and Australian positions clarifies that in practice, the threshold of review envisioned for both types of appeals is in fact the same. In other words, a unified approach to the appellate review of findings of fact and apportionment of liability has been taken.

[50] By way of example, in the English Court of Appeal decision in Wells v Mutchmeats Ltd and Another [2006] EWCA Civ 963 (“Wells v Mutchmeats”) at [15], the court quoted Brook LJ’s judgment in Plumb v Lisa Ayres and Ryford Ltd, Court of Appeal transcript [1988] 1028/2 of 17 March 1999:

Similarly, the more recent English Court of Appeal’s decision Woodham v M Turner T/A Turners of Great Barton and Peterborough City Council [2012] EWCA Civ 375, is illustrative of the view that when the appellate court is satisfied that the trial judge erred in his analysis of the evidence in relation to the blameworthiness of the parties, it will intervene. The court remarked at [36] as follows:

[51] Very recently, in Satnam Rehill v Rider Holdings Limited [2012] EWCA Civ 628, the English Court of Appeal discussed the applicable principles of appellate review of apportionment of liability (in contributory negligence) by a lower court. In this case, allowing the appeal in part, the court substituted the apportionment of liability of the lower court from one-third to half. Citing its earlier decision in Karen Janet Eagle (By her Litigation Friend E E Giles) v Garth Maynard Chambers [2003] EWCA Civ 1107 approvingly, the court noted, at [28]:

It seems to us that an appellate court ought to intervene in appeals against apportionment of liability when it can be shown that the trial judge erred in principle, misapprehended the facts, or is otherwise clearly shown to have been wrong.

[52] A similar approach to this issue has been taken in Australia as illustrated by the decision in Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALR 529 at [8] where Gibbs CJ, Mason, Wilson, Brennan and Deane JJ merely observed that such findings would not be reviewed lightly as distinct from belonging to a special category of fact finding:

In Macquarie Pathology Services Pty Ltd v Sullivan (Court of Appeal (NSW), 28 March 1995) (unreported), Clarke JA said:

[53] While it is important to clarify the approach taken in The Macgregor as cited in TV Media, it is crucial to also appreciate that findings on apportionment import a large number of discretionary considerations. In C (A Child) v Imperial Design Limited [2001] Env LR 33 at [45]–[46] the English Court of Appeal discussed the comparatively narrower approach taken in The Macgregor:

[54] As highlighted in the above excerpt, an appellate court should be mindful of the fact that by reason of the discretionary nature of apportionment, wherein the identified causes of damage cannot be clearly attributed to either party, often there is no intelligible way of distinguishing between why a trial judge ordered, for example, 25% and not 40% of the liability to be borne by one party. In such cases, the appellate court ought not to readily intervene on the basis that it would have exercised its discretion differently had it decided the matter as a first instance court. That said the review of apportionment discretion should not be made impossible. Judges are obliged to justify their determinations on apportionment with clear reasoning (see Thong Ah Fat v Public Prosecutor [2012] 1 SLR 676 at [14]–[46]). Particularly, where the apportionment decision of the trial judge is supported by cogent reasons alluding to the interaction of the respective parties’ individual culpability in a myriad of identified causes from which the damages flowed, the appellate court should be slow to intervene. The phrase “exceptional circumstances” used in The Macgregor should be understood in the light of the real concerns surrounding the disturbing of discretionary decisions of the trial judge. Having said that, it is clear that the threshold of appellate review of apportionment of liability in England and Australia is the same as that concerning a finding of fact, ie, when the apportionment was plainly wrong or unjustified on the totality of the evidence before the trial judge. We endorse this approach. In the circumstances, the law on appellate review of apportionment of liability as stated by this Court in TV Media should be read in light of our clarifications here.

[55] We reiterate that the principal objective of the appellate process must be to do justice by correcting plainly wrong decisions. This function, a constitutional responsibility of this Court, is a necessary pre-requisite to ensuring that public confidence in the administration of justice is maintained. A proper balance has therefore to be struck by appellate courts between due deference and undue deference in relation to findings of fact (and apportionment) by trial courts. Arid historical distinctions between correctable errors of law and irretrievable errors of fact no longer resonate. Improvements to the record, such as verbatim transcripts that are electronically recorded, now permit closer appellate review of findings of fact by trial courts. The trial judge’s notes are no longer the only reliable record of what has transpired below. With this development, some of the previously exclusive advantages of triers of fact have shrunk.

[56] We return to the facts. The appellant argued that the apportionment of liability by the Judge in the present case was not just and equitable as the location of the WDU at the WDU Area was the predominant cause of the damage to the paintings in the Art Gallery; which Liquid Advertising was allegedly solely responsible for. For the reasons stated above at [42]–[47], Liquid Advertising and the appellant were both responsible for the location of the WDU in the WDU Area. Also, it was precisely because of the absence of clear evidence to establish whether the Water Inlet Hose (ie, hydrolytic degradation and Helical Line Feature) or the location of the WDU at the WDU Area was the predominant cause, that the Judge held that Liquid Advertising and the appellant were jointly liable and held that all three causes contributed to Ho See Jui’s damages. The appellant was found to bear a greater percentage of the liability for its greater responsibility in relation to all three identified causes.

[57] The appellant’s alternative submission that the Judge erred in finding that the hydrolytic degradation and the Helical Line Feature were two separate causes was a non-starter. The hydrolytic degradation occurred because the appellant had selected and supplied a hose which was made of material unsuitable for the carriage of water. The Helical Line Feature was a manufacturing feature of the hose which was exacerbated by the improper use of the installed hose intended for the carriage of air rather than water. No evidence was led to establish that the hose would have ruptured notwithstanding the Helical Line Feature or vice-versa, negating the element of causation for one of the identified causes. The Judge was correct in defining the causes separately. In any event, the appellant’s complaint did not further its cause as even if as per the appellant’s suggestion the unsuitable material of the Water Inlet Hose and the location of installation of the WDU were the only two operative causes, apportionment would have been varied to the advantage of Liquid Advertising. The very fact that the appellant was found to be responsible for both causes as compared with Liquid Advertising which was specifically found only to be liable for its responsibility in relation to one of the causes pointed to apportionment in Liquid Advertising’s favour.

[58] Accordingly, in light of the discretionary nature of apportionment and the lack of any clear evidence of error, the apportionment of liability by the Judge was not disturbed.

[59] Order 16 r 8 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules”) states as follows:

[60] While the Rules set out the necessary procedure, as observed by Chao Hick Tin JA in Checkpoint Fluidic Systems International Ltd v Marine Hub Pte Ltd and Another Appeal [2009] SGHC 134, it is trite law that indemnity can arise from contract, express or implied, or by conduct. A right to indemnity arises where the relationship between the parties is such that either in law or in equity there is an obligation upon one party to indemnify the other. Chao JA quoted Lord Wrenbury’s observations in the Privy Council decision of Eastern Shipping Company, Limited v Quah Beng Kee [1924] AC 177 at 182–183 are particularly instructive. Lord Wrenbury stated as follows:

[61] The Judge ordered the appellant to indemnify Liquid Advertising’s 30% (to be assessed) on the basis of the breach of implied terms of the Reinstallation Agreement. The implied terms identified pursuant to the SGA were as follows:

(a) the Water Inlet Hose supplied under the contract for reinstallation of the WDU was to be of satisfactory quality; and

(b) the said Water Inlet Hose was to be reasonably fit for its purpose of the carriage of water.

In the present case, on the Judge’s reasoning, it is cardinal that the obligation to indemnify arises from the contractual agreement between the parties. It is clear that the breach of the above-mentioned terms relates squarely to the first and second causes identified by the Judge, namely (a) the hydrolytic degradation of the Water Inlet Hose and the (b) Helical Line Feature. It is also important to note that the Judge did not find that Liquid Advertising was responsible for these causes. Rather, she clearly stated that Liquid Advertising’s liability under all three causes of action was premised solely on its responsibility in directing the appellants to install the WDU in the WDU Area rather than the more suitable wet pantry area (ie, the third cause). The Reinstallation Agreement did not relate to the location of installation of the WDU.

[62] While the appellant owed contractual duties to Liquid Advertising consisting of the implied terms stated above, capable of construction as an implied indemnity, as Liquid Advertising’s liability was not premised on the above breaches or obligations, the question arose as to why the appellant was obliged to indemnify Liquid Advertising in the first place. It is trite law that a narrow construction should be adopted in the context of implied indemnities. The location of the installation rather than the material used for the Water Inlet Hose could not be read into the implied obligations upon the appellant of “satisfactory quality” and “fitness for purpose”. Alternatively, the Judge could have considered an indemnity on the basis of breaches of the Third Maintenance Contract which would have related more closely to the cause founding Liquid Advertising’s liability, giving rise to an obligation to indemnify on the part of the appellant. While Liquid Advertising pleaded the Maintenance Contracts as a basis for their contractual indemnity claim, the Third Maintenance Contract expired on 21 June 2007, prior to the rupture of the Water Inlet Hose (above at [10]). Thus the indemnity could not have been founded on this basis either.

[63] Accordingly, Liquid Advertising’s application for an indemnity was erroneously founded on the basis of breaches of the above-mentioned implied terms which did not mirror or relate to the liability incurred by Liquid Advertising. In effect, the appellant was ordered to indemnify Liquid Advertising for the breach of an obligation which it did not owe to it under the scope of the implied terms of the Reinstallation Agreement. The lack of congruity between the obligations owed by the appellant and the liability incurred by Liquid Advertising required the Judge’s order of indemnity to be set aside.