A sub-contractor does not owe a duty of care to a joint management body representing property owners for pure economic loss due to lack of direct contractual relationship and established allocation of responsibilities.

Introduction

[1] The 2nd Defendant ("D2") filed an application dated 8 May 2023 vide encl 61 to strike out the Plaintiff's ("P") suit against it. Enclosure 61 is made under O 18 r 19(1)(a), (b) or (d) of the Rules of Court 2012.

[2] On 18 July 2023, I allowed encl 61 and struck out P's action against D2. Here are the grounds of my decision.

[3] Previously on 26 April 2023, I had allowed a similar striking out application by the 3rd Defendant. The grounds of my decision in that respect is reported at [2023] MLRHU 1013; [2023] MLJU 1344; [2023] 1 LNS 1195; [2023] AMEJ 1193. The grounds of my decision herein in relation to D2 are similar to that earlier grounds of decision pertaining to the 3rd Defendant.

The Parties

[4] 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.

[5] The 1st Defendant 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").

[6] D2 is a sub-contractor employed by the Main Contractor to install waterproofing works at the tower blocks and the facilities floor of the Housing Project.

[7] The Main Contractor also appointed the 3rd Defendant as a sub-contractor to supply and install hot dipped galvanized pressed steel sectional water tanks with high-density polyethylene lining for the Housing Project.

[8] The parties' relationship is summarized below.

[9] P initiated a claim against D2 for loss arising out of the repair works done to rectify the purported defects in the common properties of the Housing Project arising out of D2's alleged negligence. The question that arises here is whether D2, a sub-contractor, 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

[10] 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 car-parks together with common properties.

[11] 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.

[12] The Main Contractor was appointed by the Developer to build and construct the aforesaid buildings at the Housing Project. Via a letter of award dated 11 March 2016, D2 was appointed as a sub-contractor to install the waterproofing works at the tower blocks and the facilities floor of the Housing Project. D2 duly completed the inst