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2022 MarsdenLR 321
HIGH COURT MALAYA SHAH ALAM
MRCB BUILDERS SDN BHD – Appellant
Versus
LIANG UNITED ENGINEERING STUDIO – Respondent
[Civil Suit No: BA-22C-18-05-2021]
A contractor cannot claim professional negligence against a designer consultant due to lack of duty of care and insufficient legal proximity, reinforcing prior legal precedents.
Headnote:(A) Rules of Court 2012 – Order 18 Rule 19(1) – Negligence – Duty of care – Plaintiff filed suit against Defendant for professional negligence related to designs of contiguous bored pile walls – Court examined the existence of duty of care and legal proximity based on previous judgments including Lok Kok Beng – It concluded that the Defendant owed no duty of care due to lack of legal proximity and potential policy concerns. (Paras 1, 31, 34)
(B) Negligence – Tort of Negligence – The Plaintiff argued a cause of action for negligence against Defendant based on the alleged duty of care concerning construction project – Court compared with established precedents confirming no duties owed by project consultants to main contractors – The importance of statutory arrangements and contracts was recognized. (Paras 28, 30)
Facts of the case: The Plaintiff, a main contractor, engaged the Defendant for engineering designs of a project, and disaster occurred resulting in damages to bored pile walls. The Plaintiff claimed breach of duty against the Defendant for alleged negligence in design, while the Defendant moved to strike out on grounds of no reasonable cause of action. (Paras 1-10)
Findings of Court: The Court found that the allegations did not produce a reasonable duty of care and that existing legal precedents supported this view. (Paras 31-32)
Issues: The key issue addressed was whether the Defendant had an established duty of care owed to the Plaintiff and if the Court could dismiss or strike out the suit under current rules. (Paras 14, 31)
Ratio Decidendi: The Court affirmed that there was no sufficient legal proximity to establish a prima facie duty of care from Defendant to Plaintiff based on existing rules and previous legal judgments, particularly highlighting policy concerns for the construction industry. (Paras 30-31)
Result: The Court struck out the Plaintiff's suit with costs. (Para 37)
JUDGMENT
(Court Enclosure No 9)
A. Novel Issues
[1] This judgment discusses the following two novel questions:
(1) whether the plaintiff company (Plaintiff), the main contractor of a construction project (Project) who has appointed a sub-contractor, Biaxis (M) Sdn Bhd (Biaxis), to design, execute and complete contiguous bored pile walls in the Project (CBP Walls), can file a suit for professional negligence against the defendant (Defendant) who has been appointed by Biaxis to provide designs of CBP Walls [Defendant's Designs (CBP Walls)]. This issue concerns whether the Defendant owed a duty of care to the Plaintiff regarding the Defendant's Designs (CBP Walls) [Alleged Duty of Care (CBP Walls)]; and
(2) if the Court decides that the Alleged Duty of Care (CBP Walls) did not exist, should the Court exercise its discretion under O 18 r 19(1) of the Rules of 2012 (RC) to dismiss or strike out This Suit?
B. Salient Facts
[2] PJ Sentral Development Sdn Bhd (Developer) was the developer of the Project and had appointed the Plaintiff as the Project's main contractor and "Superintending Officer" (SO).
[3] Minconsult Sdn Bhd (Minconsult) had been appointed by the Developer to be the Civil and Structural Engineering consultant for the Project.
[4] By way of a "Letter of Award" dated 22 September 2014 [Contract (Plaintiff- Biaxis)], the Plaintiff appointed Biaxis to design, execute and complete CBP Walls.
[5] Clauses 7.1 and 16.1 of the Contract (Plaintiff-Biaxis) have provided for Biaxis to indemnify the Plaintiff with regard to, among others, any loss and damage which may arise in respect of CBP Walls [Indemnity Provisions (Plaintiff-Biaxis)].
[6] The Defendant is a sole proprietorship which provides, among others, engineering consultancy services.
[7] Biaxis had issued a "Work Order" dated 1 October 2015 to the Defendant with regard to the provision of the Defendant's Designs (CBP Walls) to Biaxis [Contract (Biaxis-Defendant)].
[8] Pursuant to the Contract (Biaxis-Defendant), based on information provided by Biaxis, Plaintiff and Minconsult, Defendant's Designs (CBP Walls) were provided to Biaxis.
[9] The Plaintiff had accepted the Defendant's Designs (CBP Walls) in October 2014. Hence, Biaxis commenced construction works regarding CBP Walls (Works).
[10] While Biaxis was performing the Works around June 2015, the following damage occurred regarding CBP Walls [Damage (CBP Walls)]:
(1) there were movements in "Type 1", "Type 1A" and "Type 5" CBP walls;
(2) there were cracks in neighbouring buildings; and
(3) damage was caused to underground cables belonging to Telekom Malaysia Bhd.
[11] In accordance with the arbitration agreement between the Plaintiff and Biaxis in the Contract (Plaintiff-Biaxis), the Plaintiff commenced arbitral proceedings against Biaxis to recover damages in respect of the Damage (CBP Walls) [Arbitration (Plaintiff-Biaxis)].
C. Legal Proceedings
[12] The Plaintiff filed this action against the Defendant to recover damages for the Damage (CBP Walls) (This Suit). According to the Statement of Claim filed in This Suit (SOC), among others:
(1) the Alleged Duty of Care (CBP Walls) existed; and
(2) the Defendant had breached the Alleged Duty of Care (CBP Walls) and this breach had caused the Damage (CBP Walls).
[13] In Court enclosure no 9 (encl 9), the defendant has applied to Court to strike out and dismiss This Suit on the following grounds:
(1) No reasonable cause of action is disclosed in This Suit within the meaning of O 18 r 19(1)(a) RC [Subparagraph (1)(a)];
(2) This Suit is scandalous, frivolous or vexatious under O 18 r 19(1)(b) RC [Subparagraph (1)(b)]; and
(3) This Suit constitutes an abuse of Court process pursuant to O 18 r 19(1) (d) RC [Subparagraph (1)(d)] and/or the Court's inherent jurisdiction.
[14] In addition to the novel issues stated in the above para 1, this Court will also decide on the following questions in encl 9:
(1) can the Court simultaneously strike out and dismiss This Suit under O 18 r 19(1) RC?;
(
