A subcontractor does not owe a duty of care for pure economic loss to a party without a direct contractual relationship.

Quay Chew Soon J:

Introduction

[1] The 3rd Defendant ("D3") filed an application dated 16 February 2023 vide encl 28 ("Encl 28") to strike out the Plaintiffs ("P") suit against it. Enclosure 28 is made under O 18 r 19(1)(a), (b) or (d) of the Rules of 2012 ("Rules of ").

[2] On 26 April 2023, I allowed Encl 28 and struck out P's action against D3. Here are the grounds of my decision.

The Parties

[3] P is the joint management body of Tropicana Bay Residence @ Penang World City ("Housing Project"). P is empowered under s 143(2) of the Strata Management Act 2013 to represent the parcel owners of the Housing Project in these proceedings.

[4] The 1st Defendant ("D1") is the developer of the Housing Project ("Developer"), ivory Associates Sdn Bhd is the main contractor engaged by the Developer for the Housing Project ("Main Contractor").

[5] D3 is a sub-contractor employed by the Main Contractor to supply and install hot dipped galvanized pressed steel sectional water tanks with high-density polyethylene lining for the Housing Project ("Water Tanks").

[6] The Main Contractor also appointed the 2nd Defendant as a subcontractor to design, supply and install the waterproofing system in the Housing Project. The 2nd Defendant is not a relevant party to the present striking out application by D3.

[7] The parties' relationship is summarized below.

[8] P initiated a claim against D3 for loss arising out of the repair work done to rectify the purported defects of the Water Tanks arising out of D3's alleged negligence. The question that arises here is whether D3, as a subcontractor, owes a duty of care in tort to P or the purchasers of the Housing Project ("Purchasers"). When all parties involved had allocated their risks in providing their respective rights and obligations under their separate contracts with each other down the chain of construction.

Background Facts

[9] The Housing Project is erected at part of the land known as Parcel A, PT 3945, Bayan Mutiara, Persiaran Bayan Indah, Mukim 13, Daerah Timor Laut, Pulau Pinang. It has five blocks of condominium, consisting of four blocks of condominium of 22 floors and one block of affordable housing condominium of 21 floors. It comprises a total of 1,343 condominium units with three podium car-parks, one lower ground carparks together with common properties ("Buildings").

[10] The respective Purchasers entered into sale and purchase agreements (Schedule H) under the Housing Development (Control and Licensing) Act 1966 ("Schedule H SPA") with the Developer, to purchase their respective units in the Housing Project.

[11] The Main Contractor was appointed by the Developer to build and construct the Buildings. Via a letter of award dated 7 June 2016, D3 was appointed as a sub-contractor to install the Water Tanks in the Buildings. D3 completed the installation of the Water Tanks in early 2017. The Main Contractor inspected the Water Tanks, and confirmed that the installation of the Water Tanks were in good order and condition. Below is an example of the 'Completion of Work' signed by the Main Contractor.

[12] The Water Tanks were then handed over to the Main Contractor after completion of the installation work. Thereafter, D3 has not been in the custody, care, control and charge of the Water Tanks. The certificate of completion and compliance ("CCC") for the Housing Project was issued on 14 September 2017 by the architect concerned. Subsequently, the Purchasers took vacant possession of their respective units. P, the joint management body of the Housing Project, was established on 6 October 2018