JUDGMENT

Gopal Sri Ram JCA:

This is the judgment of the court.

The Facts

In the early hours of the morning of 16 February 1989 a fire broke out in the building at No. 1, Park Road, Penang. It claimed several lives and caused serious injury to others. They were all young children. We will say in a moment how they came to be there.

For convenience, we will refer to the parties to this appeal by the title assigned to each of them in the court of first instance.

The first defendant is a school. It has a campus in Penang. It needed a hostel to accommodate some of its students there. It found a building: a very old dwelling house. According to the unchallenged evidence, the building had been in existence even before 1922.

The second defendant is a local authority. It owned the building in question. It let the old building out to the first defendant. It knew very well the use to which the first defendant would put the building. It knew that young children would live in that old building. But it did nothing to upgrade the building to ensure that it was safe for use as a hostel by young children. That much is borne out by the evidence. And there is no serious dispute about this.

In all the