The plaintiffs are husband and wife, and they came to Singapore with their son, then aged 6, on August 20, 1980. The 1st plaintiff came here to take up the appointment of general manager of Caterpillar Far East, and the office had made prior reservation of rooms in the Hyatt Regency Hotel ("the Hotel") for him and his family. Hence, upon arrival, they proceeded direct to the Hotel. The plaintiffs were accorded "VIP check-in," they were met on arrival by the sales manager who escorted them to their rooms. The plaintiffs took three rooms on the 12th floor of the Hotel, namely, Rooms 1247, 1248 and 1249, the middle room 1248 with adjoining doors to Rooms 1247 and 1249, respectively. They made use of Room 1249 as the master bedroom, Room 1248 as the sitting room and Room 1247 as the bedroom for their son. The 1st plaintiff proposed for security reason to use one entrance at all times for entry and exit. Accordingly, the front doors to Rooms 1247 and 1249 were chain-locked by them and they returned the keys to these rooms to the Hotel, retaining only the key to Room 1248, which they used as the sitting room and also for the purpose of entry and exit. The plaintiffs and their son stayed at the Hotel for about 1½ months, that is, from August 20 to October 7, 1980, while awaiting and looking for suitable residential accommodation.

Shortly after the plaintiffs had checked into the Hotel, they applied for and were allotted two safe deposit boxes, one for each, which they used to put their jewellery and important documents. The counter serving the safe deposit boxes was also the cashier's counter. It was very open, facing the coffee house and near to the shopping arcade. Near to the counter, there was a circular seat where visitors would sit while waiting for people. At the time of application for the deposit boxes, the 1st plaintiff asked whether a private room would be available for use for putting in and removing articles from the safe deposit boxes in privacy. He was told that there was no such room. Hence, every time they made use of the safe deposit box or boxes, the boxes were opened at the counter and articles were taken from or put in in full view of the people around the area.

The plaintiffs also had a jewellery box which they normally carried when they travelled; it was a small velvet covered box made of plywood with a key lock. They put some items of their jewellery in this box which they locked. They kept this box in a drawer of the dressing table in Room 1249. On August 31, 1980, the plaintiffs attended a function in the evening and both of them wore some items of jewellery. When they returned to the Hotel it was late that night and the plaintiffs put these items of jewellery in their jewellery box. The next morning, the 1st plaintiff left for work, and the 2nd plaintiff remained in the room; their son was not with them, as he had stayed with their friends the previous night. At about 10.30 a.m., their friends brought their son back and the 2nd plaintiff went downstairs to meet them. When she went down, she took with her the items of jewellery which were in the jewellery box. All of them went to the coffee house for a snack. They were there for about an hour. Whilst she was downstairs, she did not put the jewellery in the safe deposit box as there was a big tourist group and it was very crowded at the safe deposit box counter. She felt highly inconvenient to do so. She therefore went back to her room and put the items of jewellery back into the jewellery box, in the drawer of the dressing table. She remained in her room with her son until about 4 p.m. when an estate agent called and asked her to view an apartment at Pearl's Bank. She and her son then left the Hotel with the estate agent, but she did not bring along with her any of the items of jewellery in the jewellery box as she was going out with a stranger. Soon thereafter, the 1st plaintiff returned to the Hotel, and that was about 4.30 p.m. On entering Room 12