Ng Boo Han and another v Teo Boon Hiang Edward

Edmund Leow JC:

[2] In the court below, the district judge (“the DJ”) allowed the Respondent’s claim in part and substantially dismissed the Appellants’ counterclaim. The Appellants now appeal against his decision. They also filed Summons No 646 of 2014 (“SUM 646/2014”) seeking to admit further evidence to support their case.

[3] As the parties could not agree on the series of events leading up to the present dispute, I will set out each side’s account in turn.

[4] Sometime in October 2010, the Appellants stopped by the Respondent’s house to ask him who built his house. They were looking for someone to rebuild their house and were attracted by the look of the Respondent’s house. The Respondent told them that he built it himself and that, having observed their house in the neighbourhood, he had ideas and suggestions on how to rebuild their house. At the conclusion of the first meeting, the Respondent asked the Appellants to keep in touch.

[5] At the Appellants’ initiative, the parties met again in November 2010 at the Respondent’s house. The Respondent showed them around his house and explained the building process and the structural elements to them. He represented to the Appellants that:

(a) he could build a beautiful house for them and transform their premises into a house that was “one of its kind” in the estate;

(b) he could maximise the built-in area of their house;

(c) he would arrange and manage all aspects of the project for them;

(d) the project would be a “turn-key” development and the Appellants would be able to move into the premises after the project was completed without the need for any follow-up works; and

(e) it was a convenient project for the Respondent to undertake as his house was located near the Appellants’ house.

[7] About one week later, the Appellants had a third meeting with the Respondent where they discussed the details of the project. The parties agreed on a price of $350,000 for the project with handover to take place by August 2011. The terms of their agreement were recorded in a simple written contract dated 20 January 2011 (“the Contract”) prepared by the Respondent and signed by him and the Second Appellant. It provided as follows:

[8] The Appellants made the down payment of $140,000 on 22 January 2011. The Respondent commenced work on the premises in the last week of January 2011. On 18 May 2011, upon completion of the roof, the Appellants made the second payment of $140,000.

[10] On 24 August 2011, the parties’ neighbour, Mr Shahul Sali (“Shahul”), offered to mediate their dispute and a meeting was arranged between the parties at Shahul’s home that evening. At the meeting, the Respondent promised that he would complete the project by 29 September 2011 provided that the Appellants paid him an extra $10,000 for additional works requested for the attic.

[11] On 26 August 2011, the Appellants agreed to pay the Respondent $40,000 which comprised $30,000 towards the final payment and an additional sum of $10,000 for the additional works in the attic so that the Respondent would resume work on the project. After this payment, the outstanding sum under the Contract was $40,000.

[12] On 25 September 2011, the Second Appellant brought to the Respondent’s attention a list of uncompleted works that needed to be completed before the premises could be handed over the Appellants. The Respondent took offence and threatened to stop work. After the Appellants pacified him and pleaded with him to continue the works, the Respondent promised that the construction would be completed by 12 October 2011.

[13] On 12 October 2011, the Respondent failed to properly handover the premises to the Appellants as there were too many uncompleted items and defects. The handover date was revised again to 16 October 2011. However, the Respondent yet again failed to hand over the premises on that date.

[14] On 17 October 2011, the Appellants met with the Respondent’s son and daughter and brought to their attention a list of defects and uncompleted works. On 21 October 2011, the Respondent’s daughter presented to the Appellants a list of the outstanding defects (“the Defects List”) and asked the Second Appellant to sign it. However, the Second Appellant refused to sign it as there was no previous mention of having to sign a contract with the Respondent’s daughter and the contract did not include some of the defects that were made known to the Respondent in the Appellants’ aforementioned list, such as those relating to the roof and the marble flooring.

[16] The Appellants’ counterclaim against the Respondent is for a total sum of $193,532.01, which is broken down into the following components:

(%4) It should be noted, however, that the cost of rectification work claimed by the Appellants changed over the course of proceedings and was ultimately reduced to a claim for $150,000.

[19] The Respondent started work one week after the Contract was signed. In May 2011, the Appellants requested him to furnish the attic with wooden deck flooring and built-in cabinets. The Respondent gave them a quotation of $10,000 for this additional work and they agreed.

[20] Between July and August 2011, the Appellants started making unreasonable demands of the Respondent, such as by asking for additional works and items which were never previously agreed. As the Respondent was timid by nature, he carried out the additional works requested in silent protest. Due to these additional works, the project could not be completed by 1 August 2011 as stated in the Contract.

[21] In August 2011, the Respondent requested that the Appellants pay him the remaining 20% for the project, as well as the additional $10,000 for the attic works. Although the Appellants could have moved in by that time, they did not do so and used that as an excuse not to pay the outstanding balance of 20%. It was only after Shahul interceded that the Appellants paid the Respondent another $40,000 (ie, part of the outstanding 20% plus $10,000 for fitting out the attic).

[22] The Respondent ultimately used recycled materials only for a few exterior parts of the house as follows:

(a) wooden planks for the main gate;

(b) wooden decking for the ground floor exterior yard;

(c) wooden strips supporting the polycarbonate trellis; and

(d) wooden planks for the exterior walls of the music room.

(%4) These recycled materials formed about 10% of the entire construction of the house and the Appellants were fully aware of their usage at all material times throughout the construction period. For example, the recycled timber for the decking was based on the rustic design the Appellants had requested and they had approved of the timber before it was used. The recycled timber was also chosen for its irregular joints and gaps, which were intended to give the house a natural and rustic appearance.

[23] On 24 September 2011, the First Appellant and the Respondent conducted the first site inspection of the construction works before handover. To the Respondent’s shock, the First Appellant embarked on a fault-finding mission and refused to pay the outstanding sum of $40,000, claiming that he did not have the money. The Respondent was offended but nonetheless attended to the items identified by the First Appellant.

[24] Another site inspection was conducted on 2 October 2011, during which the Appellants continued finding faults with the works, such as the plaster works being uneven and the steel works being rough. The Respondent explained that these were deliberately done that way to give the house a rustic and natural look, which was the same as how he built his house. However, the Appellants insisted that these were defects that needed to be rectified.

[26] The next day, the Respondent’s son and daughter visited the Appellants to ask for the outstanding $40,000 that they owed him. Instead of paying up, the Appellants asked the Respondent to change the four glass panels in the study room from 6mm glass to 8mm glass, and to install a tempered glass door for the toilet in the children’s bedroom. The Appellants then took the Respondent’s children around the house and came up with a list of 26 more items that they wanted the Respondent to change or provide. In the course of the week, the list was increased to 35 items. Of the 35 items, about 30 items were unreasonable demands in that they had never been agreed upon between the parties.

[27] The Respondent’s children attended to the 35 items and completed almost all of them. They then tried to tie down the Appellants in writing by preparing a list of all the items demanded by the Appellants and getting them to sign on it. However, the Appellants refused to sign the document. The Respondent and his children then concluded that the Appellants were just taking him for a ride and commenced proceedings for:

(a) the agreed sum of $10,000 for the attic works;

(b) a total sum of $49,000 for the additional works and items demanded by the Appellants; and

(c) the outstanding balance of $30,000.

[28] It should be noted that there is an error in the itemisation of the Respondent’s claim as it is undisputed that the sum of $10,000 for the attic works had been already paid (see [21] above). The Respondent’s claim should therefore be for an outstanding balance of $40,000 under the Contract plus the total sum of $49,000 for additional works.

[29] The DJ substantially found in favour of the Respondent. He considered that the Appellants must have engaged the Respondent to build their house as they wanted to replicate his house. They had agreed to give him a free hand to build a rustic, English-country type house, and could not complain that the Respondent’s work and the materials used were not up to industry standards, insofar as these reflected the parties’ agreed “rustic” style. Thus, the DJ ignored the expert evidence adduced by the Appellants stating that various aspects of the Respondent’s work were defective.

[32] As for the Respondent’s claim, the DJ allowed the claim for the unpaid balance sum but rejected the claim for payment for additional works on the basis that these additional works had been incorporated into the Contract when the Respondent acceded to the Appellants’ requests without asking for payment.

[33] On appeal, the Appellants contend that the DJ had erred in:

(a) finding that the parties had agreed on building a rustic country-type house like the Respondent’s;

(b) dismissing expert evidence on what constituted a defect;

(c) finding that the Appellants had substantially failed to prove that the rectification works were carried out;

(d) finding that the rectification works may have been more than rectification;

(e) holding that the Appellants, by refusing the sign the defects list, had unreasonably prevented the Respondent from rectifying the defects; and

(f) finding that the Appellants were unreliable witnesses.

[35] Although there is nothing in the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) or the Rules of Court (Cap 322, R 5, 2014 Rev Ed) which restricts the High Court’s discretion to admit further evidence in an appeal, it has been held that for appeals to the High Court where the decision below was made after a full trial, the conditions in Ladd v Marshall [1954] 1 WLR 1489 (“Ladd v Marshall”) would still apply: WBG Network (S) Pte Ltd v Sunny Daisy Ltd [2007] 1 SLR(R) 1133 at [13]. The Ladd v Marshall conditions are as follows:

(a) the evidence could not have been obtained with reasonable diligence for use in the trial;

(b) the evidence must be such that, if given, would probably have an important influence on the result of the case, though it need not be decisive; and

(c) the evidence must be such as is presumably to be believed or apparently credible.

[37] It is important to note here that although Mr Loggie’s AEIC only included three invoices, all five invoices were in evidence at trial below: they were exhibited in Mr Mah’s AEIC dated 3 June 2013. Therefore the issue before me is not whether the five invoices should now be admitted into evidence but whether the 2nd Appellant’s explanation for the apparent inconsistencies in the Appellants’ case ought to be admitted.

[38] In this regard, I find that the first condition in Ladd v Marshall is not satisfied. This is because during the proceedings below, the DJ had expressly asked the Appellants whether they wished to put in a further AEIC explaining the various inconsistencies in their case:

[39] However, the Appellants declined to do so and decided to let their case stand on the strength of Mr Mah’s AEIC and their evidence under cross-examination. Having chosen that path, it is not open to them to now seek to admit the Further Affidavit which could have been tendered at trial below. As the Court of Appeal noted in Lassiter Ann Masters v To Keng Lam (alias Toh Jeanette) [2004] 2 SLR(R) 392 at [24], the first condition under Ladd v Marshall is a very stringent one – any sort of judgmental error would not be sufficient to meet this condition. Nor is it tenable for the Appellants to say that these were lapses on the part of their former solicitors and not due to any fault of their own – the Appellants’ former solicitors were their legal representatives and the Appellants would naturally have to bear the consequences of any acts or omissions committed by them.

[41] A key issue in this appeal is whether the Appellants had in fact contracted for a “rustic” house like the Respondent’s. The DJ reasoned that this must have been the case given that the Appellants had engaged the Respondent to rebuild their house precisely because they were impressed with his house. The natural inference was that they must have wanted the Respondent’s house replicated, together with all its “rustic” features.

[42] However, the Appellants’ evidence was that they were impressed not so much by the rusticity of the Respondent’s house but by its unique façade and its efficient use of space. As the First Appellant explained on the stand:

[43] I am conscious of the fact that the DJ had considered the Appellants to be unsatisfactory witnesses and therefore might have discounted their evidence on this score as being unreliable. The DJ’s assessment of the Appellants’ credibility is of course not something that I am in a position to question. However, I am of view that the Appellants’ evidence is corroborated by other objective facts. First, the Contract made no mention of the fact that the Appellants’ house was to be built in a “rustic” manner. Since it was drafted by the Respondent, he could have included this important point in the Contract if it was indeed part of the parties’ agreement. Second, the Respondent’s argument that the Appellants desired the house to be built in a “rustic” manner was only raised belatedly after his lawyers came into the picture. If the parties had indeed agreed to build a rustic house, one would have expected the Respondent to immediately point this out when the Appellants found fault with his work during the site inspections. But there is no evidence that he did so; instead, he appeared to have accepted the Appellants’ criticisms and attempted to rectify the defects they pointed out.

[44] That said, the Contract did give the Respondent a “free hand” in designing and building the Appellants’ house. Thus, even if this was not expressly stipulated, it was open to the Respondent to build the house in a rustic manner if he so wished. However, I am of the view that the argument in relation to rusticity cannot be used to whitewash every flaw in the Respondent’s work. Items which were in breach of building regulations, were flawed on a functional level or which were a result of poor workmanship rather than a conscious aesthetic decision would clearly constitute defects which should have been rectified.

[45] With the above principle in mind, I will now go through the list of items which the Appellants claim were defects and consider whether the allegation is made out for each item. In considering this issue, it bears noting that the Respondent failed to call his own expert witnesses to rebut the Appellants’ experts. Nor was the credibility of the Appellants’ experts seriously challenged under cross-examination. I must therefore accept their evidence unless they are “obviously lacking in defensibility”: Saeng-Un Udom v Public Prosecutor [2001] 2 SLR(R) 1 at [27].

[46] The marble tiles on the ground floor of the house were laid with the polished side down and unpolished backing side up as the floor finish. Mr Loggie opined that this was contrary to recognised building practice because, with the polished surface facing downwards, it was “very difficult to get adhesion … to the floor substrate”. However, when counsel for the Respondent asked Mr Loggie whether it would be acceptable to use unpolished finishing for the marble tiles if this was deliberately done to achieve a rustic effect as part of the parties’ agreement, Mr Loggie answered in the affirmative.

[48] A timber laminate floor finish was used for the flooring of the second storey. The Respondent admitted on the stand that the laminate floor materials were damaged and needed to be rectified:

[49] I therefore find that this was a defect.

[50] As the DJ had found, the Respondent had provided a zinc roof even though the Contract provided for ceramic tile roofing. Further, the polycarbonate roofing used for the external area was incomplete at the time of Mr Loggie’s inspection and was not watertight. These were clearly defects that went beyond matters of taste and needed to be rectified.

[52] There was no evidence that the uneven plaster works or poor painting of the walls would result in any functional (and not merely aesthetic) problems. In my view this fell within the “free hand” allowance that the Respondent was given and did not constitute a defect.

[53] Mr Loggie noted that the 4mm glass used for the study room glass panel was too thin and considered it to be unsafe as the glass was liable to crack easily under impact. He pointed to industry specifications which stipulated a minimum thickness of 10mm. Since the Respondent’s deviation from industrial standards raised safety issues, I find that this constituted a defect.

[54] According to Mr Loggie, the staircase railings provided by the Respondent contained large gaps which were inconsistent with building regulations requiring the gaps in staircase railings to be no more than 150mm wide. The Respondent’s response was that this was part of his rustic design. In my view, pursuing a rustic design cannot justify breaching building regulations, which are imposed to ensure the safety of users. I therefore find that this was a defect.

[57] The Appellants produced an expert report by a licensed electrical worker (“Mr Tang”) stating that the electrical works for the house failed to comply with industrial standards in numerous respects. His evidence on this score was not seriously challenged. I therefore find that this constituted a defect as well.

[58] In relation to the electrical works, the DJ had raised concerns as to whether the Appellants were in fact seeking to “upgrade” the electrical works at their house. This issue arose because Mr Tang mentioned on the stand that an electrician called Lesman had told him that “his customer wanted to apply … to upgrade to 60amp 3-phase” and “the house was at number 1”. However, Mr Tang’s evidence on this score was rather garbled and clearly constituted hearsay. Furthermore, when counsel for the Respondent asked him whether the upgrade was ultimately carried out, Mr Tang said that “[i]t was not done” and that the owners “did not pay”. I therefore see no basis for the DJ’s finding that the electrical works carried out by the Appellants might have included an “upgrade”.

[62] In any event, I saw no reason to disbelieve the evidence of Mr Mah that he had did carry out the rectification works and was paid $150,000 by the Appellants. The discrepancy between this sum of $150,000 and the Appellants’ initial claim for $185,850 was clearly explained in Mr Mah’s AEIC dated 31 May 2013 – the sum of $185,850 was based on the original quotation provided by Mr Mah to the Appellants, but the Appellants ultimately chose not to carry out certain work items in the quotation, while others (relating to the replacement and revarnishment of outdoor timber elements) were only partially carried out. This is a perfectly plausible explanation and I have no difficulty in accepting it even without considering the Second Appellant’s explanation in the Further Affidavit (which I have disallowed).

[63] However, since I have found that certain defects have not been proven by the Appellants, the following items should be deducted from the sum of $150,000:

(a) Replacement of timber deck and revarnishment of outdoor timber members – $21,400 (this sum takes into account the deduction of $13,850 from the quoted price because the Appellants chose not to redo the timber deck outside the music room, the staircase and the wall panel)

After these deductions, the total cost of rectification amounts to $99,250, and represents the damages that the Appellants are entitled to claim in respect of the defects.