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Friday, April 23, 2010

Tiger Powerhitz Sdn Bhd v Guinness Anchor Marketing Sdn Bhd

[2003] 1 MLJ 314


Tiger Powerhitz Sdn Bhd v Guinness Anchor Marketing Sdn Bhd

Headnote

Court Details

HIGH COURT (KUALA LUMPUR) — CIVIL SUIT NO S3–22–509 OF 2000

ARIFIN ZAKARIA J

7 JUNE 2002

Catchwords

Civil Procedure — Contempt of court — Order of commital, application for — Committal proceedings — Body corporate — Whether the alleged contemnor had notice of the order as provided in O 45 r 7(3)(a) of the Rules of the High Court 1980 — Non-indorsement of notice as required under O 24 r 7(4) of the Rules of the High Court 1980 — Whether the court had discretion to nevertheless enforce the order granting leave to issue committal proceedings — Whether court should exercise such discretion — Rules of the High Court 1980 O 24 r 7(4) & O 45 r 7(3)(a)

Summary

The court granted an ex parte injunction order (‘the injuction order’) prohibiting the defendant, its agents or servants from using the name ‘Tiger Powerhitz’ in concerts sponsored and carried out by the defendant or in any charity show, event, presentation in any manner carried out by the defendant using the name ‘Tiger Powerhitz’. The plaintiff obtained an ex parte order (‘the order’) for leave to institute contempt proceedings against one of the directors of the defendant (‘the alleged contemnor’), for breach of the injunction order. The defendant and the alleged contemnor filed an application to set aside the order.

Holdings

Held, striking out the plaintiff’s motion and allowing the defendant’s application:

(1) Order 45 r 7(3)(a) of the Rules of the High Court 1980 (‘the RHC’) states that an order requiring a body corporate to do or abstain from doing an act shall not be enforced as mentioned in O 45 r 5(ii) and (iii) unless a copy of the order has been served personally on the officers against whose property leave is sought to issue a writ of seizure and sale or against whom an order for committal is sought (see p 317C–D).

(2) The alleged contemnor was never personally served with the injunction order and as such the defendant and the alleged contemnor had no notice of the terms of the injunction order. Further, it was common ground that the alleged contemnor was not present when the injunction order was made, nor was he ever notified of the terms of the injunction order, either by telephone, telegram or otherwise (see p 317D–E; Class One Video Distributors Sdn Bhd & Anor v Chanan Singh a/l Sher Singh & Anor [1997] 5 MLJ 209 distinguished.

(3) The injunction order did not contain the proper endorsement as required by O 24 r 7(4) and Form 87 of the RHC. So long as the alleged contemnor had knowledge of the terms of the order, the non-endorsement of the penal notice is not fatal. However, in the



Page 315>>present case, it has been established that the alleged contemnor had no knowledge of the terms of the order (see p 318E–G).

Bahasa Summary


Bahasa Malaysia summary


Mahkamah telah memberikan satu perintah injunksi ex parte (‘perintah injunksi tersebut’) yang melarang defendan, ejen-ejen atau pekerja-pekerjanya menggunakan nama ‘Tiger Powerhitz’ dalam konsert-konsert yang dianjurkan dan diadakan oleh defendan atau dalam mana-mana pertunjukan amal, persembahan dan pertunjukan dalam apa-apa cara yang diadakan oleh defendan menggunakan nama ‘Tiger Powerhitz’. Plaintif telah mendapatkan satu perintah ex parte (‘perintah tersebut’) untuk kebenaran memulakan prosiding penghinaan terhadap salah satu daripada pengarah defendan (‘penghina yang dikatakan’), kerana perlanggaran perintah injunksi tersebut. Defendan dan penghina yang dikatakan tersebut telah memfailkan satu permohonan untuk mengenepikan perintah tersebut.


Bahasa Holdings


Diputuskan, menolak usul plaintif dan membenarkan permohonan defendan:


(1) Aturan 45 k 7(3)(a) Kaedah-Kaedah Mahkamah Tinggi 1980 (‘KMT’) menyatakan bahawa satu perintah yang menghendaki satu badan korporat membuat atau menahan daripada membuat satu perbuatan tidak sepatutnya dikuatkuasakan sebagaimana yang disebutkan dalan A 45 k 5(ii) dan (iii) kecuali satu salinan perintah tersebut telah disampaikan secara persendirian ke atas pegawai-pegawai yang mana kebenaran hartanah dipohon untuk mengeluarkan satu writ penyitaan dan jualan atau terhadap mereka satu perintah kerana penghinaan dipohon (lihat ms 317C–D).


(2) Penghina yang dikatakan tersebut tidak pernah disampaikan secara persendirian dengan perintah injunksi tersebut dan oleh itu defendan dan penghina yang dikatakan tersebut tidak mempunyai notis tentang terma-terma perintah injunksi tersebut. Tambahan pula, ia adalah diketahui semua bahawa penghina yang dikatakan tersebut tidak hadir semasa perintah injunksi tersebut dibuat, dan beliau juga tidak pernah dimaklumkan tentang terma-terma perintah injunksi tersebut, sama ada melalui telefon, telegram atau sebaliknya (lihat ms 317D–E); Class One Video Distributors Sdn Bhd & Anor v Chanan Singh a/l Sher Singh & Anor [1997] 5 MLJ 209 dibeza.


(3) Perintah injunksi tersebut tidak mengandungi pengindorsan yang betul sebagaimana yang dikehendaki oleh A 24 k 7(4) dan Borang 87 KMT. Selagi penghina yang dikatakan tersebut mempunyai pengetahuan tentang terma-terma perintah tersebut, notis penting yang tidak diindorskan tersebut tidak membawa mudarat. Namun begitu, dalam kes semasa, adalah terbukti bahawa






Page 316>>penghina yang dikatakan tersebut tidak mempunyai pengetahuan tentang terma-terma perintah tersebut (lihat ms 318E–G).]

Notes

Notes

For cases on application for order of commital, see 2 Mallal’s Digest (4th Ed, 2001 Reissue) Paras 1500–1512.

Cases referred to

Cases referred to

Class One Video Distributors Sdn Bhd & Anor v Chanan Singh a/l Sher Singh & Anor [1997] 5 MLJ 209 (distd)

Datuk Hong Kim Sui v Tiu Shi Kian & Anor [1987] 1 MLJ 345 (refd)

Iberian Trust Ltd v Founders Trust and Investment Co, Ltd [1932] 2 KB 87 (refd)

Kesatuan Pekerja-Pekerja Perusahaan Dunlop Malaysia v Md Jaafar bin Abdul Carrim & Anor [1998] 2 MLJ 244 (refd)

Malaysian Bar v Tan Sri Dato Abdul Hamid bin Omar [1989] 2 MLJ 281 (refd)

Yukilon Manufacturing Sdn Bhd & Anor v Dato’ Wong Gek Meng & Ors (No 4) [1998] 7 MLJ 551 (refd)

Legislation referred to

Legislation referred to

Rules of the High Court 1980 O 24 r 7(4), O 45 rr 5(ii), (iii), 7(3)(a), Form 87

Lawyers

Mahadevi Nadchatiram (Shanti Segaram with her) (Mahadevi Nadchatiram & Partners) for the plaintiff.

Khoo Guan Huat (Eow Kean Fatt with him) (Skrine) for the defendants.

Judgement - Arifin Zakaria J

Arifin Zakaria J : On 24 July 2000, this court granted an ex parte injunction order (‘the order’) prohibiting the defendant, its agents or servants from using the name ‘Tiger Powerhitz’ in the following concerts sponsored and carried out by the defendant on:



(1) 27 July 2000 at Dewan Jubli Intan (Baru) Segamat;

(2) 29 July 2000 at SJK @ Tuan Poon School;

(3) 30 July 2000 at Dewan Raya Gelang Patah, Gelang Patah, Johor; and

(4) 3 August 2000 at Hokkien Association Hulu Klang,



or in any charity show, event, presentation in any manner carried out by the defendant using the name ‘Tiger Powerhitz’. The plaintiff alleged that the defendant failed to comply with the order by:



(1) placing advertisements in Sin Chew Jit Poh and Quang Ming Daily on 27 July 2000; and

(2) publishing a magazine entitled Tiger Powerhitz on 28 July 2000.





Page 317>>

On 30 November 2001, the plaintiff obtained an ex parte order from this court for leave to institute contempt proceedings against Micheal Daniel Van Der Poel, one of the directors of the defendant company, for breach of the order.

On 24 January 2002, the defendant and Micheal Daniel Van Der Poel (‘the alleged contemnor’) filed an application (encl 47) to set aside the order dated 30 November 2001. The said application and the plaintiff’s notice of motion were heard together. After hearing submissions of counsel for the parties, I allowed the said application with costs and struck out the plaintiff’s notice of motion with no order as to costs.

My grounds for allowing the defendant’s and the alleged contemnor’s application are as follows.

The alleged contemnor was not personally served with a copy of the order

Order 45 r 7(3)(a) of the Rules of the High Court 1980 (‘the RHC’) states that an order requiring a body corporate to do or abstain from doing an act shall not be enforced as mentioned in O 45 r 5(ii) and (iii) unless a copy of the order has been served personally on the officers against whose property leave is sought to issue a writ of seizure and sale or against whom an order for committal is sought. It was contended for the defendant and the alleged contemnor that the defendant and the alleged contemnor were never personally served with the order and as such the defendant and the alleged contemnor had no notice of the terms of the order. Further, it is common ground that the alleged contemnor was not present when the order was made, nor was he ever notified of the terms of the order, either by telephone, telegram or otherwise. It is also not in dispute that the alleged contemnor was away in Australia on his annual leave during the period between 18 July 2000 to 8 August 2000 during which the order was made by the court. Thus, on the facts before me, I find that the plaintiff failed to satisfy this court that the alleged contemnor had been notified of the terms of the order by telephone or telegram or he was otherwise made aware of the terms of the order.

In his submission, the learned counsel for the plaintiff sought to rely on the case of Class One Video Distributors Sdn Bhd & Anor v Chanan Singh a/l Sher Singh & Anor [1997] 5 MLJ 209, where at p 216 Haidar J (as he then was) said:



In this case, though the order was not personally served on the second defendant, I am satisfied that the second defendant — having had the benefits of counsel’s advice — is deemed to know the terms of the order. In any event, the second defendant did not deny that he had knowledge of the terms of the order. The word ‘otherwise’ in r 7(6) would be wide enough to cover this situation.



I find that the facts of the abovementioned case can be distinguished from the present case as the alleged contemnor here had categorically denied knowledge of the terms of the order and further he had also expressly stated in his affidavit (encl 46) that he was not notified by his solicitors of the terms of the order.



Page 318>>

Similarly with the Privy Council case of Datuk Hong Kim Sui v Tiu Shi Kian & Anor [1987] 1 MLJ 345 which was cited by counsel for the plaintiff. In that case, the solicitors wrote to the client (alleged contemnors) about the terms of the order. However, the alleged contemnors chose not to abide by the injunction order. Moreover the second injunction order was served on the company ‘Red Rose’ on the same day.

As Sir Ivor Richardson stated at p 347:



Thus the Rules recognize that directors and officers are the human agencies responsible for the conduct of the affairs of companies. They fix a director with liability for the conduct of the company and so with liability for any breach by the company of an injunction where the director has appropriate notice that he is liable to process of execution if the company disobeys the order. (Emphasis added.)



In the present case, there is no evidence before the court indicative of the fact that the director had any appropriate notice of the order.

For the above reasons, it is my finding that the alleged contemnor had not personally been served with the order, nor had he been given the appropriate notice. Therefore, in the circumstances, I hold that he could not be held liable for contempt of the order.

There was no proper penal endorsement

It is not in dispute that the order does not contain the proper endorsement as required by O 24 r 7(4) and Form 87 of the RHC. The plaintiff contended that this was not fatal to the application. The case of Class One Video Distributor Sdn Bhd was cited in support of his contention.

In that case Haidar J at p 216 stated:



In the circumstances I am of the view that, following Allport Alfred James [[1989] 1 MLJ 388], which cited with approval the English case of Sofroniou [(1991) FCR 322], the defect in not complying with the indorsement of the penal notice is not fatal so long as the second defendant had knowledge of the terms of the order. (Emphasis added.)



What can be discerned from that case is that so long as the alleged contemnor had knowledge of the terms of the order, the non-endorsement of the penal notice is not fatal. However, in the present case it has been established that the alleged contemnor had no knowledge of the terms of the order. Therefore, the authority cited could not support the plaintiff’s argument.

In this context, reference should also be made to the case of Yukilon Manufacturing Sdn Bhd & Anor v Dato’ Wong Gek Meng & Ors (No 4) [1998] 7 MLJ 551, there Abdul Malik Ishak J at p 558 states in no uncertain terms:



Different penal notices should be used in cases of mandatory and prohibitory orders and also in a case where the order is against an individual or a corporation. In the case of an order against a company or a corporation, the penal notice must be specific and should name all the directors and officers of



Page 319>>the company or corporation and that order should be served on each and every person named in the penal notice.



I wholly agree with the view of the learned judge and for the same reasons the court order of 30 November 2001 ought to be set aside.

Ambiguity in the order

It is evident that the purpose of the order was to restrain the defendant from using the name of ‘Tiger Powerhitz’ in the Tiger Powerhitz Charity Show Concerts held between 27 July 2000 to 3 August 2000 at the specified venues. It is contended for the defendant and the alleged contemnor that the order did not expressly state that the defendant is restrained from advertising the same or publishing the Tiger Powerhitz magazines. It is argued that in view of the apparent ambiguity in the order, therefore, the defendant and the alleged contemnor could not be held liable for the alleged breach of the order.

In the case of Iberian Trust Ltd v Founders Trust and Investment Co, Ltd [1932] 2 KB 87, Luxmore J stated at p 95:



From this it appears that in order to constitute a contempt of court for which the directors may be punished there must be wilful disobedience either by the company or its servants or directors to do something which it has been ordered to do. Now, turning back to Rowlatt J’s order, what is it that the defendant company have been ordered to do which the company and its directors have failed to do? In terms, the order does not direct the defendant company to do anything — it says: ‘that the plaintiffs do have a return of the said shares within fourteen days.’ Am I to spell out of that an order on the defendant company to do something? I think not. If the court is to punish anyone for not carrying out its order, the order must in unambiguous terms direct what is to be done. (Emphasis added.)



The same principle has been adopted in the case of Kesatuan Pekerja-Pekerja Perusahaan Dunlop Malaysia v Md Jaafar bin Abdul Carrim & Anor [1998] 2 MLJ 244 where his lordship Nik Hashim J at pp 249–250 stated:



First and foremost, it must be emphasized that ‘committal is a very serious matter. The courts must proceed very carefully before they make an order to commit to prison; and rules have been laid down to secure that the alleged contemnor knows clearly what is being alleged against him and has every opportunity to meet the allegations’ (per Cross J in Re B(JA) (An Infant) [1965] 1 Ch 1112).

The rules governing the application for an order of committal is provided for under O 52 of the RHC. Authorities have shown that the procedural rules must be complied with and be strictly enforced. Lord Denning MR in McIlraith v Grady [1968] 1 QB 468 at p 477 said:

‘… we must remember the fundamental principle that no man’s liberty is to be taken away unless every requirement of the law has been strictly complied with … .’



It is also the law that the grounds on which an order of committal is sought must be set out in the statement accompanying the notice of motion (see O 52 rr 2(2) and 3(3)). Although there is no requirement for the notice of motion to set out



Page 320>>the grounds, nevertheless this information must be stated in the statement with sufficient particularity to enable the person alleged to be in contempt to meet the charge … . The nature of the contempt must be identified and spelt out precisely. The person alleged to be in contempt must know what exactly he is said to have done or omitted to do which constitute a contempt of court (see Chiltern District Council v Keane [[1985] 2 All ER 118]).



In the present case, I am satisfied that even though the order did not expressly mention the acts complained of it is, however, clear from its terms that the defendant is to be restrained from using the name ‘Tiger Powerhitz’. Therefore, in my opinion, it is not open to the defendant to argue that the advertisements and the publication of Tiger Powerhitz magazine fall outside the ambit of the order. However, I am satisfied with the explanation given by the defendant that all the necessary measures and steps that need to be taken were taken by the defendant to ensure compliance with the order the moment defendant was made aware of the order but due to shortage of time, the advertisements in both Sin Chew Jit Poh and Quang Ming Daily on 27 July 2000 and the publication of the magazine on 28 August 2000 could not be stopped. The detailed explanation is found in paras 25, 32 and 34 of the affidavit of the alleged contemnor in encl (53).

Delay

The other factor to be considered is the delay in making the application by the plaintiff. In this case there was a delay of almost 15 months by the plaintiff in filing the application for leave to institute committal proceedings. The plaintiff did not offer any explanation for the delay.

In the case of Malaysian Bar v Tan Sri Dato Abdul Hamid bin Omar [1989] 2 MLJ 281, the Supreme Court stated that contempt is a serious matter and should be pursued within a reasonable time. In that case, it was held that a lapse of nearly nine months was an inordinate delay. In the present case, there was a delay of 15 months and no explanation was given by the plaintiff. In the circumstances, I find that there has been an inordinate delay on the part of the plaintiff. This is clearly another factor which weighs against the plaintiff.

Conclusion

In the light of the above, I am of the considered view that the defendant’s and the alleged contemnor’s application to set aside the leave granted to the plaintiff to commence committal proceedings against the alleged contemnor ought to be allowed, and for the same reasons, the plaintiff’s substantive motion for committal be struck out. With regard to costs, I order that the costs of this application to be paid by the plaintiff to the defendant and there will be no order as to costs as regards the plaintiff’s motion for committal.



Plaintiff’s motion struck out, defendant’s application allowed.



Reported by Peter Ling

Malaysian European Production System Sdn Bhd v Zurich Insurance (M) Bhd

[2003] 1 MLJ 304


Malaysian European Production System Sdn Bhd v Zurich Insurance (M) Bhd

Headnote

Court Details

HIGH COURT (PULAU PINANG) — CIVIL APPEAL NO 12–376 OF 2002

KAMALANATHAN RATNAM J

6 JANUARY 2003

Catchwords

Arbitration — Stay of proceedings — Application — Steps taken in proceedings — Dispute between parties to refer matter to arbitration as stated in the policy insurance — Whether the defendant had taken a step in the proceedings — Whether sessions court had power to grant stay — Whether there was any dispute to refer to arbitration — Arbitration Act 1952 s 6

Summary

The plaintiff bought a policy insurance from the defendant designed to cover the insured’s death and if death or disablement occured, then the insured’s estate or the insured was entitled to a sum except if the death or disablement resulted directly or indirectly from suicide or attempted suicide. During the period cover, one of the plaintiff’s employees (‘the insured’) died due to ‘pulmonary aedema to acute drowning’. The plaintiff informed the defendant of this fact by a fax message and further filed this suit against the defendant on 22 May 2002 and the first return date of the summons was on 17 July 2002. On 11 June 2002, the plaintiff served by registered post the summons on the defendant. The defendant’s solicitors then sent a letter purportedly dated 16 February 2002, ie before the summons was filed, asking for an extension of time to file its defence. Whilst this wrongly dated letter requested the plaintiff’s solicitors to serve the summons on them, the plaintiff’s solicitor’s clerk had in the meantime filed an affidavit of service on 19 June 2002 confirming that he had served the summons on the defendant by AR Registered post. On 4 September 2002, the defendant filed an application to stay all proceedings and to refer the matter to arbitration as stated in the policy of insurance. The learned sessions court judge granted an order in terms of the defendant’s application. Dissatisfied with that decision, the plaintiff appealed. The issues for the court’s determination were whether: (i) the defendant had taken a step in the proceedings when it asked for an extension of time in the letter dated 16 February 2002; (ii) the sessions court had power to grant the stay; and (iii) there was any dispute to refer the matter to arbitration as stated in the policy insurance.

Holdings

Held, dismissing the appeal with costs:

(1) Since the plaintiff had consented to the defendant’s request for extension of time and since application for a stay of proceedings was filed before the next return date and the plaintiff who had indeed served the summons as early as on 11 June 2002 on the defendant personally, had failed to take judgment on 17 July 2002 or the next return date, the defendant had not, by merely writing the letter dated 16 February 2002, taken any step in the



Page 305>>proceedings within the meaning of s 6 of the Arbitration Act 1952 (‘the Act’) (see pp 311H–312A); Ford’s Hotel Co v Bartlett [1896] AC 1 and Sanwell Corp v Trans Resources Corp Sdn Bhd & Anor [2002] 2 MLJ 625 followed.

(2) Section 6 of the Act is specific. The words ‘any party to the legal proceedings may … apply to the court’ must logically mean, the court in which the proceedings had been commenced. That is why whilst all other sections in the Act make reference to the High Court, it is only s 6 that does not refer to the High Court. It merely says ‘apply to the court’. If the said section is to bear the meaning given by the plaintiff, then there is no reason why the legislators when formulating this section had not said ‘apply to the High Court’. Since the words ‘High Court’ have been specifically left out, then it was not for this court to read otherwise into the Act. In the circumstances, the application for stay had been properly taken in the sessions court (see p 312F–H).

(3) The relevant portion to consider in the arbitration clause were the words ‘all differences arising out of this policy’. It was clear that there was a difference of opinion out of this policy. The plaintiff said that the death was accidental and thus was covered by the policy. The defendant said that the death was caused by suicide. There could be no clearer instance of a difference between the parties. What is essential is that the court should, on the material before it, be in a position to express its satisfaction that the defendant is ready and willing to do all things necessary to the proper conduct of the arbitration. The available evidence in this case clearly supported the inference that the defendant was ready and willing to do all things necessary to refer the matter to arbitration (see p 313C–F); Accounting Publications Sdn Bhd v Ho Soo Furniture Sdn Bhd [1998] 4 MLJ 497 followed.

Bahasa Summary

Bahasa Malaysia summary

Plaintif telah membeli satu insurans polisi daripada defendan dengan tujuan melindungi kematian pengambil insurans dan jika kematian atau kehilangan upaya berlaku, maka waris pengambil insurans atau pengambil insurans berhak kepada sejumlah wang kecuali jika kematian atau kehilangan upaya tersebut adalah secara langsung atau tidak langsung akibat daripada bunuh diri atau percubaan membunuh diri. Dalam tempoh perlindungan tersebut, salah seorang daripada pekerja plaintif (‘pengambil insurans’) telah mati akibat ‘pulmonary aedema to acute drowning’. Plaintif telah memaklumkan kepada defendan tentang fakta ini melalui satu pesanan faks dan selanjutnya memfailkan guaman ini terhadap defendan pada 22 Mei 2002 dan tarikh pulangan pertama saman tersebut adalah pada 17 Julai 2002. Pada 11 Jun 2002, plaintif telah menyampaikan saman tersebut melalui pos berdaftar ke atas defendan. Peguamcara defendan kemudian telah menghantar sepucuk surat yang dikatakan bertarikh



Page 306>>16 Februari 2002, iaitu sebelum saman tersebut difailkan dan telah meminta perlanjutan masa bagi membolehkan ia memfailkan pembelaannya. Sementara surat yang bertarikh salah tersebut meminta peguamcara plaintiff menyampaikan saman tersebut ke atas mereka, kerani peguamcara plaintif telah pada masa yang sama memfailkan satu afidavit penyampaian pada 19 Jun 2002 mengesahkan bahawa beliau telah menyampaikan saman tersebut ke atas defendan melalui pos AR Berdaftar. Pada 4 September 2002, defendan telah memfailkan satu permohonan untuk menggantung semua prosiding dan untuk merujuk perkara tersebut kepada timbangtara sebagaimana yang dinyatakan dalam insurans polisi tersebut. Hakim mahkamah sesyen yang arif telah membenarkan perintah seperti yang dipohon dalam permohonan defendan. Berasa tidak puas hati dengan keputusan tersebut, plaintif telah merayu. Persoalan-persoalan untuk ditentukan oleh mahkamah adalah sama ada: (i) defendan telah mengambil langkah dalam prosiding bila ia meminta perlanjutan masa melalui surat bertarikh 16 Februari 2002 tersebut; (ii) mahkamah sesyen mempunyai kuasa untuk membenarkan penggantungan tersebut; dan (iii) terdapat apa-apa pertikaian untuk merujuk perkara tersebut kepada timbangtara sebagaimana yang dinyatakan dalam insurans polisi tersebut.

Bahasa Holdings

Diputuskan, menolak rayuan dengan kos:

(1) Memandangkan plaintif telah bersetuju dengan permintaan defendan untuk lanjutan masa dan memandangkan permohonan untuk satu penggantungan prosiding telah difailkan sebelum tarikh pulangan berikutnya dan plaintif yang telahpun menyampaikan saman tersebut seawal 11 Jun 2002 ke atas defendan sendiri tetapi telah gagal untuk mendapatkan penghakiman pada 17 Julai 2002 atau tarikh pulangan berikutnya, defendan tidak boleh dianggap, dengan hanya menulis sepucuk surat bertarikh 16 Februari 2002 tersebut, telah mengambil apa-apa langkah dalam prosiding bagi maksud s 6 Akta Timbangtara 1952 (‘Akta tersebut’) (lihat ms 311H–312A); Ford’s Hotel Co v Bartlett [1896] AC 1 dan Sanwell Corp v Trans Resources Corp Sdn Bhd & Anor [2002] 2 MLJ 625 diikut.

(2) Seksyen 6 Akta tersebut adalah spesifik. Perkataan-perkataan ‘any party to the legal proceedings may … apply to the court’ secara logiknya bermaksud, mahkamah di mana prosiding tersebut dimulakan. Itu adalah sebabnya tatkala semua seksyen lain dalam Akta tersebut merujuk kepada Mahkamah Tinggi, hanya s 6 tidak merujuk kepada kepada Mahkamah Tinggi. Ia hanya menyatakan ‘apply to the court’. Sekiranya seksyen tersebut membawa maksud seperti yang diberikan oleh plaintif, maka tiada sebab untuk badang perundangan semasa membentuk seksyen ini tidak menyatakan ‘apply to the High Court’. Memandangkan perkataan-perkataan ‘High Court’ secara spesifiknya tidak dimasukkan, maka ia bukanlah untuk mahkamah ini membaca



Page 307>>sebaliknya ke dalam Akta tersebut. Dalam keadaan sedemikian, permohonan untuk penggantungan tersebut adalah tindakan betul di hadapan mahkamah sesyen (lihat ms 312F–H).

(3) Bahagian yang relevan untuk dipertimbangkan dalam klausa timbangtara tersebut adalah perkataan-perkataan ‘all differences arising out of this policy’. Adalah jelas bahawa terdapat pendapat yang berbeza tentang polisi ini. Plaintif menyatakan bahawa kematian tersebut adalah satu kemalangan dan oleh itu dilindungi oleh polisi tersebut. Defendan menyatakan bahawa kematian tersebut adalah akibat bunuh diri. Tiada keadaan yang lebih jelas tentang satu perbezaan antara pihak-pihak tersebut. Apa yang penting adalah mahkamah hendaklah, berdasarkan bahan di hadapannya, berada dalam kedudukan untuk menyatakan kepuasannya yang defendan bersedia dan berkesanggupan untuk membuat apa yang perlu bagi satu tindakan timbangtara yang betul. Keterangan yang ada dalam kes ini dengan jelas menyokong inferens bahawa defendan bersedia dan berkesanggupan membuat apa yang perlu untuk merujuk perkara tersebut ke timbangtara (lihat ms 313C–F); Accounting Publications Sdn Bhd v Ho Soo Furniture Sdn Bhd [1998] 4 MLJ 497 diikut.]

Notes

Notes

For cases on application for stay of proceedings, see 1 Mallal’s Digest (4th Ed, 1998 Reissue) paras 1016–1033.

Cases referred to

Cases referred to

Accounting Publications Sdn Bhd v Ho Soo Furniture Sdn Bhd [1998] 4 MLJ 497 (refd)

Brighton Marine Palace & Pier Ltd v Woodhouse [1893] 2 Ch 486 (refd)

Ford’s Hotel Co v Bartlett [1896] AC 1 (folld)

Interscope Versicherung Sdn Bhd v Sime Axa Assurance Bhd [1999] 2 MLJ 529 (refd)

Sanwell Corp v Trans Resources Corp Sdn Bhd & Anor [2002] 2 MLJ 625 (folld)

Trans Resources Corp Sdn Bhd v Sanwell Corp & Anor (No 2) [1999] 2 MLJ 609 (refd)

Usahabina v Anuar bin Yahya [1998] 7 MLJ 691 (refd)

Legislation referred to

Legislation referred to

Arbitration Act 1952 s 6

Rules of the High Court 1980 O3 r 5(3), O 12 rr 6, 7

Appeal from

Appeal from: Civil Suit No 52–1131 of 2002 (Sessions Court 2, Pulau Pinang)

Lawyers

Simon Tan (Lee Hean Cheng & Co) for the plainitff/appellant.

P Ramanathan (VP Nathan & Partners) for the defendant/respondent.



Page 308>>

Judgement - Kamalanathan Ratnam J:

Kamalanathan Ratnam J:

Facts The plaintiff bought a Group Personal Accident Policy from the defendant and paid a premium of RM1,989.13. The policy covered the insured namely the insured person named or referred to in the specification of Insured Persons (Insured). The policy, inter alia, was designed to cover the insured’s death during the period of cover and if death or permanent disablement occurred, then in either case, the insured’s estate or the insured was entitled to a sum of RM120,000. However, one of the exceptions to the payment was if the death or disablement resulted directly or indirectly from suicide or attempted suicide. On 26 March 2000 which was during the period of cover, one of the plaintiff’s employees (‘the insured’), Barbara a/p Anthony Dass died and the death certificate issued by the Government Hospital showed the cause of death as ‘pulmonary aedema to acute drowning’. On 28 March 2000, the plaintiff informed the defendant of this fact by a fax message.

Unfortunately, no other correspondence has been enclosed in the appeal record to show when the defendant actually repudiated liability to the plaintiff. There must have been a repudiation because the plaintiff filed this suit against the defendant on 22 May 2002 and the first return date of the summons was on 17 July 2002. On 11 June 2002, the plaintiff served by registered post the said summons on the defendant.

The next relevant letter exhibited by the parties is a letter from the defendant’s solicitors to the plaintiff and purportedly dated 16 February 2002. I cannot understand why the defendant’s solicitors dated the letter even before the summons was filed, and yet stated the correct summon number on the said letter. As the facts would unfold, the contents of this letter are very important to both parties. This letter is reproduced for its contents.



VP NATHAN & PARTNERS

PEGUAMBELA DAN PEGUAMCARA

Your Reference: L/274/2001/LHC/ST

When Replying Please

Quote Our Reference: VPN/PRM/RN/SM/B 15202P 16/2/2002

M/s Lee Hean Cheng & Co.

Advocates & Solicitors,

No 41-5-3, 5th Floor, ATTENTION: MR. SIMON TAN

Wisma Prudential, FAX/POST

Jalan Cantonment,

10250 Penang.

Dear sirs,

Re: Penang Sessions Court (2) Civil Action No 52–1131–2002

We refer to the telephone conversation between our Mr PR Manecksha and your Mr Simon Tan this afternoon.

We shall be obliged if you will serve on us a copy of the summons and statement of claim as we have instruction to enter appearance and file a defence.



Page 309>>

We confirm that you will get as a mention on behalf on 2 August 2002 and give us at least one month to enable us to file the defence.

We thank you for your indulgence.

In the meantime please note that the reference for this file is B 39202P and shall be obliged if you will use same in all future correspondence.

Kindly, update your records.

Yours faithfully,

Sgd.



Whilst this wrongly dated letter requests the plaintiff’s solicitors to serve the summons on them, the plaintiff’s solicitor’s clerk had in the meantime filed an affidavit of service on 19 June 2002 confirming that he had served the summons on the defendant by AR Registered post.

In the meantime on 4 September 2002, the defendant filed an application to stay all proceedings and to refer the matter to arbitration as stated in the policy of insurance. The learned sessions court judge granted an order in terms of the defendant’s application. Dissatisfied with that decision the plaintiff has appealed.

Findings of the court

The plaintiff raised three issues on appeal before me.

(1) That the defendant had taken a step in the proceedings

It was the plaintiff’s contention that having written the letter dated 16 February 2002 and in which the defendant had sought and obtained an extension of ‘at least one month to enable us to file the defence’, the defendant had taken a step in the proceedings. The plaintiff relied heavily upon the recent decision of the Federal Court in Sanwell Corp v Trans Resources Corp Sdn Bhd & Anor [2002] 2 MLJ 625. I heard Sanwell’s case at first instance (see Trans Resources Corp Sdn Bhd v Sanwell Corp & Anor (No 2) [1999] 2 MLJ 609). I held that the entry of a conditional appearance pursuant to O 12 rr 6 and 7 of the Rules of the High Court 1980 (‘the RHC’) is only available to cases where the defendant complained of an irregularity or defect in the originating process or service of the process upon him and/or where the defendant alleges that the court is without jurisdiction to deal with the dispute. I further held that the entering of an unconditional appearance could not amount to a waiver of the defendant’s right to proceed to arbitration on the basis that the plaintiff’s filing of the civil suit did not amount to either an irregularity or a defect in the writ or service thereof and in opposing the action it had not been the first defendant’s contention that the court has no jurisdiction to deal with the dispute. It must be noted that in Sanwell’s case, the defendant did not ask for nor apply to court for an extension of time to file the defence. In deciding as I did, I did not follow the decision of another High Court in Usahabina v Anuar bin Yahya [1998] 7 MLJ 691. In Usahabina, the contractor who agreed to build a house sued the house owner to recover his cost. The defendant owner having entered a conditional appearance because of the



Page 310>>existence of an arbitration clause failed to file his defence within the stipulated period. However, the plaintiff contractor allowed by letter, the defendant’s request for an extension of one week to file the defence. Since the defendant had failed to file the defence within the extended period, the plaintiff entered judgment in default of defence. Soon thereafter, the defendant applied by summons to set aside the judgment in default and to stay all proceedings pending reference to arbitration. On these facts, the High Court held that the defendant’s request for extension of time to file his defence did not amount to the taking of any steps in the proceedings. However, the court went on to hold that the filing of an unconditional appearance meant that the defendant had elected to allow the action to go on and had accordingly submitted to the jurisdiction of the court and that this amounted to a step in the proceedings thereby precluding the defendant from obtaining an order staying the proceedings.

In Interscope Versicherung Sdn Bhd v Sime Axa Assurance Bhd [1999] 2 MLJ 529, the Court of Appeal upheld the decision in Usahabina. I must admit that when I decided Sanwell, I did not have the benefit of the decision of the Court of Appeal in Interscope. However when Sanwell went up to the Court of Appeal, the Court of Appeal relied on its own decision in Interscope and reversed Sanwell. The Federal Court in hearing Sanwell, very meticulously went through each of these cases and decided that the entry of appearance was a mandatory procedural step to be taken by an applicant in proceedings in the High Court. It was a step in the proceedings as required by the RHC. However, it was a permitted, excluded or an exempted step in the proceedings that did not amount to a step in the proceedings within the meaning of s 6 of the Arbitration Act 1952 (‘the Act’) which would prejudice the applicant’s right to apply for a stay of the proceedings. The Federal Court went on to hold that if the applicant had served any pleadings, then he had clearly taken a step in the proceedings within the meaning of s 6 of the Act, since he has elected to proceed with the proceedings in the High Court and would therefore be barred from applying for a stay of proceedings to refer the dispute to arbitration. However, the Federal Court went on to hold that if the applicant had taken any other action in the proceedings other than steps of entering appearance or serving pleadings, the court would then have to consider whether such action amounted to a step in the proceedings by determining the nature of the action and whether or not it indicated an unequivocal intention to proceed with the suit and to abandon the right to have the dispute disposed off by arbitration.

Relying on the decision of the Federal Court, the plaintiff argued that by applying and obtaining an extension of time to file the defence, the defendant had indicated an unequivocal intention to proceed with the suit and had therefore abandoned the right to have the dispute disposed off by arbitration. Having considered carefully the arguments of the plaintiff, I do not agree with this view. As very succinctly explained by Mohtar Abdullah FCJ in Sanwell, the defendant only applied to stay proceedings after it had failed to file the defence within the extended period of time given to it and after the plaintiff had obtained judgment. By then it was too late.



Page 311>>

From reading the judgment of the Federal Court in Sanwell, it becomes clear that the defendant had two choices upon receipt of extension of time. He could have filed the defence or he could have within the extended time applied for a stay without taking any other step.

In Brighton Marine Palace & Pier Ltd v Woodhouse [1893] 2 Ch 486, North J held that asking for time by letter is not taking a step in the action; it is taking a step outside the action altogether. I agree with this proposition of the law. The defendant can apply for extension of time pursuant to O 3 r 5 of the RHC. It is pertinent to reproduce O 3 r 5 which reads as follows:



5 Extension, etc of time

(1) The court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorized by these rules or by any judgment, order or direction, to do any act in any proceedings.

(2) The court may extend any such period as is referred to in para (1) although the application for extension is not made until after the expiration of that period.

(3) The period within which a person is required by these rules, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order of the court being made for that purpose.

(4) …



Since sub-r (3) provides for written consent by a letter without the need for an order of court, I hold that having given the written consent, the plaintiff cannot now seek to argue that the granting of the consent must be held against the defendant. Of course, the application by letter dated 16 February 2002 was made under sub-r (3) which provides for enlargement of time without taking any step in the proceedings. It is clear that the very object of sub-r (3) is to enable the parties to enlarge time by consent without the need to apply to court and thus taking a step in the proceedings. However, if the plaintiff had refused the application for extension of time then the defendant would have been compelled to apply to court and this would be tantamount to taking a step in the proceedings. This view becomes all the more clear with the Federal Court’s reference to the case of Ford’s Hotel Co v Bartlett [1896] AC 1. In Ford’s Hotel Co, the House of Lords held that when a defendant took out a summons or obtained an order for further time to deliver his defence, he is deemed to have taken a step in the proceedings within the meaning of the Act and was not afterwards entitled to apply for a stay on the ground that the proceedings were brought in respect of a matter agreed to be referred to arbitration.

In the circumstances, it is my judgment that since the plaintiff had consented to the defendant’s request for extension of time and since application for a stay of proceedings was filed before the next return date and the plaintiff who had indeed served the summons as early as on 11 June 2002 on the defendant personally, had failed to take judgment on 17 July 2002 or the next return date, the defendant had not, by merely writing the



Page 312>>letter dated 16 February 2002, taken any step in the proceedings within the meaning of s 6 of the Act.

(2) Sessions court has no power to grant a stay

To fully appreciate this argument of the plaintiff, it is necessary to reproduce s 6 of the Act which reads as follows:



Power to stay proceedings where there is submission to arbitration

If any party to an arbitration agreement or any person claiming through or under him commences any legal proceedings against any other party to the arbitration, or any person claiming through or under him, in respect of any matter agreed to be referred to arbitration, any party to the legal proceedings may, before taking any other steps in the proceedings, apply to the court to stay the proceedings, and the court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement, and that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.



The plaintiff’s case is that the sessions court does not have the jurisdiction to give an order to refer the matter to arbitration. This is because the ‘High Court’ as defined in the Act means the High Court in Malaya or the High Court in Sabah or Sarawak as the case may require. Further the plaintiff argued that all references to ‘court’ in the Act, referred to the High Court. The plaintiff also pointed out that O 69 of the RHC governs arbitration proceedings and that there are no such provisions in the Subordinate Courts Rules 1980. Counsel for the plaintiff argued that the defendant ought to have applied by way of an originating motion to the High Court for a stay of proceedings under s 6 of the Act and that the defendant ought not to have applied in the sessions court itself.

I do not accept this argument. Section 6 of the Act is specific. The words ‘any party to the legal proceedings may … apply to the court’ must logically mean, the court in which the proceedings had been commenced. That is why whilst all other sections in the Act make reference to the High Court, it is only s 6 that does not refer to the High Court. It merely says ‘apply to the court’. If the said section is to bear the meaning given by the plaintiff, then there is no reason why the legislators when formulating this section had not said ‘apply to the High Court’. Since the words ‘High Court’ have been specifically left out, then it is not for this court to read otherwise into the Act.

In the circumstances, it is my judgment that the application for stay has been properly taken in the sessions court.

(3) There is no dispute

The plaintiff argued that there is no dispute at all to refer the matter to arbitration since it is the plaintiff’s case that the plaintiff can only claim if the death occurred as a result of an accident and the plaintiff points out that that is also the defence’s case.



Page 313>>

The clause relating to arbitration as found in the policy reads as follows:



10 Arbitration

All differences arising out of this policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator, to the decision of two Arbitrators one to be appointed in writing by each of the parties, within one (1) calendar month after having been required in writing so to do by either of the parties or in case the Arbitrators do not agree, of an Umpire appointed in writing by the Arbitrators before entering upon the reference.

The Umpire shall sit with the Arbitrators and preside at their meetings and the making of an award shall be a condition precedent to any right of action against the company. If the company shall disclaim liability to the Insured for any claim hereunder and such claim shall not within twelve (12) calendar months from the date of such disclaimer have been referred to arbitration under the provisions herein then the claim shall for all purposes be deemed to have abandoned and shall not thereafter be recoverable hereunder.



To my mind, the relevant portion to consider are the words ‘all differences arising out of this policy’. It is clear that there has arisen a difference of opinion out of this policy. The plaintiff says that the death is accidental and thus is covered by the policy. The defendant says that the death was caused by suicide. There can be no clearer instance of a difference between the parties. In Accounting Publications Sdn Bhd v Ho Soo Furniture Sdn Bhd [1998] 4 MLJ 497, the Court of Appeal had said that what is essential is that the court should, on the material before it, be in a position to express its satisfaction that the defendant is ready and willing to do all things necessary to the proper conduct of the arbitration. The Court of Appeal emphatically has stated that at such an early stage, there is little a defendant is obliged to do in the arbitration beyond asserting a willingness to appoint an arbitrator. The available evidence in the case before me clearly supports the inference that the defendant is ready and willing to do all things necessary to refer the matter to arbitration.

Whilst I agree that this case is one that is eminently suited for trial before a court, yet it is imperative that the court must agree with the views expressed by the parties in the policy that they would rather arbitrate than litigate.

In the circumstances, this appeal is dismissed with costs.



Appeal dismissed with costs.



Reported by Ezatul Zuria Azhari

Monday, April 12, 2010

Yong Yit Swee & Ors v Sri Inai (Pulau Pinang) Sdn Bhd & Anor

[2003] 1 MLJ 290


Yong Yit Swee & Ors v Sri Inai (Pulau Pinang) Sdn Bhd & Anor

Headnote

Court Details

SESSIONS COURT (GEORGETOWN) — SUMMONS NOS 53–25 OF 1992—53–33 OF 1992

HO MOOI CHING J

14 MAY 1995

Judgement - Ho Mooi Ching J:

Ho Mooi Ching J: In the early hours of 16 February 1989, there was a fire at premises No 1, Park Road, Pulau Pinang which claimed four lives and caused injury to five others. It is undisputed that the premises belonged to the second defendant, the Majlis Perbandaran Pulau Pinang (‘MPPP’) which had rented it out to the first defendant, Sri Inai (Pulau Pinang) Sdn Bhd and that the first defendant used it as a hostel for students attending the Sekolah Sri Inai (‘the school’).

The tenancy of the premises had been obtained by way of tender. Although the third party, one EM Augustin (‘DW2’) submitted the documents in his own name, he had signed them in his capacity as principal of the school as evidenced by the stamp endorsed on all the relevant documents (pp 13–15, 18 and 23 of Bundle A, an agreed bundle of documents). Correspondence relating to the tenancy (p 23 of Bundle A) was typed on paper carrying the letterhead of the school and the words used ‘Sila hantar kepada kami satu salinan’ (emphasis added) suggest that he was acting for the first defendant, rather than in his own personal capacity. He was also a director of the first defendant company which ran the school. In the absence of any evidence to the contrary, I accept that he was, at all material times, acting as the agent of first defendant. This fact was never disputed by the first defendant, nor was it seriously disputed by the MPPP. The application submitted by DW2 was approved by the MPPP by letter dated 19 December 1986 (p 19 of Bundle A). The tenancy for a term of two years was subsequently renewed for a further term of one year on the same terms, until 19 December 1989.

The building in question was a two-storey building, with the ground floor of brick with mortar covering and the first floor of timber frame and partition walls of brick (photo 3 of Bundle C referred to). At all material times, the top floor was occupied by 13 students attending Forms 3–5 in the school, and the ground floor by two wardens. Lee Boon Ming, Surin Thinagaran, Tan Hock San and Anand Govindarajoo died as a result of the fire and their parents sue for damages caused thereby (Summons Nos 53–26, 27, 28 and 33 of 1992). Teoh Hsium Choon (‘PW2’), Lee Seng Chong (‘PW4’), Vigneshwara a/l Kumarashwaran (‘PW5’), Yeoh Ee Kee (‘PW9’) and Yong Yit Swee (‘PW13’) sue for damages in their own names (Summons Nos 53, 25, 29, 30, 31 and 32–92). All the abovementioned cases were consolidated.

At the close of the hearing, this court apportioned liability equally between the two defendants. There was no finding of contributory negligence against the students. Awards of general and special damages, interest and costs were made in all the cases. Both defendants now appeal



Page 291>>against the decision of this court in its entirety. I set out below the grounds for my decision.

The plaintiffs’ claims are based on negligence and breach of statutory duty. I agree with the submissions of learned counsel for the plaintiffs, Mr M Thayalan that both defendants largely blame each other for the incident. However, the second defendant raised the question of contributory negligence by the students. As submitted, with regard to contributory negligence, the two issues to be decided were whether the students were wholly or contributorily negligent in not making a more timely escape from the burning premises and whether PW5 contributed to the negligence by switching on the water heater at night. However, as the second issue had not been pleaded as a particular of negligence, I do not propose to deal with it, except insofar as to say that there was no evidence that PW5 had switched on the heater and left it on that night or even if there had been such evidence, that such an act amounted to negligence. In any case, it would have no effect on the claims of the other plaintiffs.

Liability

The layout of the premises is as shown in the plans P1A and P1B. It is common ground that there were three rooms marked Form 3, Form 4 and Form 5. The rooms marked Form 3 and Form 4 were connected by way of a door marked ‘Y. Another door in the Form 3 room had been sealed off by cabinets placed at ‘X’. Four boys Surin, PW4, PW13 and Lee Boon Ming occupied the Form 3 room but at the relevant time, PW13 had bunked in with PW2 in the Form 4 room. The Form 4 room was occupied by Khor Seng Choong, Anand, PW2, PW14, Tan Hock San and Yap Lip San. The Form 5 room was occupied by PW5, PW9 and William Lee Kok Foong. The wardens Frederick Augustine and Saw Bang Leong (‘DW1’) occupied the room marked ‘Warden’s Room’ in P1A.

The cause of the fire is relevant in determining liability. The plaintiffs called one Peter John Cook (‘PW3’) to testify regarding the cause of the fire and other related matters. PW3 came with highly impressive credentials as set out in exh P3. His evidence as a fire expert had been accepted by courts in Malaysia, Singapore and England. In the case of Polyvitte Ltd v Commercial Union Assurance Co PLC [1987] 1 Lloyd’s Rep 379, Garland J (in exh P4) found PW3 ‘a careful and reliable witness, who gave his evidence with restraint and consistency’. I came to the same conclusion after hearing his evidence in this case. Not only was he unshaken in cross-examination, more importantly, he was able to give reasons for the theories advanced by him after taking into account the physical evidence. His findings were consistent with the accounts of witnesses who were at the scene at the time of the fire.

The second defendant called a chemist from the Chemistry Department, Ng Hock Sing (‘DW3’), to testify as to the cause of the fire. It was clear from his evidence that he has had no special training in fire investigations and prevention. Although his evidence as an expert has been accepted by courts in Malaysia, there was no indication that this was in



Page 292>>relation to fire investigations. His opinion that the fire started in the Form 5 room was based on the fact that there were signs of intense heat on the walls and ceiling. The charring was near the beds but he disagreed that this was due to the mattresses having caught fire (photos 43 and 44). The warden, DW1 testified that he had seen falling debris outside his window but there was no evidence that the fire started in the Form 5 room, as submitted by learned counsel for the second defendant. When confronted with the testimony of the Form 5 boys that their room was not on fire, he admitted he may have been wrong about the origin of the fire. Although PW5 said he saw one of the beds in the room on fire, this was just before his second attempt to leave the room and not at the outset when they became aware of the fire. DW3 also admitted not knowing whether the fire originated in the roof void and offered no opinion as the cause of the fire. Although he had the advantage of being at the scene a few hours after the fire, his lack of specialized training in this field did not render this a very useful advantage. The unchallenged testimony of the Form 5 boys was at variance with his testimony and on the grounds stated, I did not accept his evidence nor his status as a fire expert.

The second defendant also called Shabudin bin Salleh (‘DW9’), an engineer with Tenaga Nasional Bhd who conducted an inspection of the premises on 18 December 1989 and interviewed the warden Frederick Augustin and student, William Lee, both of whom were not called as witnesses, rendering parts of his report hearsay. He opined that the fire originated from the Form 3 or Form 4 rooms, but again this was contrary to the unchallenged evidence of the students, PW2, PW5, PW13 and PW14, that when they awoke, there was no fire in the rooms, only a glow from the hall. His opinion was untenable. With regard to the cause of the fire, DW9 said that the fire could have been electrical, either as a result of a short circuit or loose contact resulting in resistive heating. He admitted that he came to those conclusions based on hearsay evidence. Nevertheless, his opinion that resistive heating was a possible cause was consistent with PW3’s evidence.

After careful consideration of the evidence, I preferred the evidence of PW3 for the reasons stated below. He explained that in order to determine the cause of the fire, one has to determine its origin. He was of the view that it originated in the roof void, after studying the fire structure. As evidenced by the photographs annexed to his report, it is clear that most of the damage was to the roof and first floor of the building while the ground floor was relatively intact except for the wardens’ room and parts of the hall (photos 46–61, 26–29). His opinion that falling debris had caused the mattresses to burn and that the mattress fire had charred the walls and ceiling was entirely plausible as the charred portions were near the two beds. It is also consistent with the evidence of PW5 and PW9 that their room was not on fire and even when PW9 left the room, he only saw thick smoke and not fire. This supports PW3’s opinion that the fire in portions of the ground floor, were due to falling debris at a later stage of the fire.

He explained that when fire originates from inside a room, the fire would rise to the ceiling due to the buoyancy of the hot gasses. If the ceiling



Page 293>>is intact, the fire would spread horizontally at the ceiling until some part of the compartment fails. In the majority of buildings, the window glass being the least resistant would be the first to go, allowing fire to vent from the windows and leaving clear evidence of flame escape. However, if the ceiling is breached first, the buoyancy of the gasses would create a chimney effect with the fire gasses venting from the top of the compartment and combustion air drawn in through the windows even if there are window openings. In this case, there was no evidence of flame escape, leading PW3 to conclude that when the fire developed on the first floor, the roof had been destroyed. He was also of the view that the even fire damage on the first floor was indicative of a fire that was already fully developed before the first floor was involved. Had the fire started in any part of the first floor, all things being equal, the damage would have been worst there, the fire having burnt longest at that spot.

Christopher Khoo (‘PW1’), a passerby who was at the scene at 2.57am and stayed to raise the alarm and render assistance testified that he saw flames twice the height of the house at the portion of the roof over the Forms 3 or 4 rooms. He confirmed that only the roof was on fire when he first arrived. Based on his evidence and that of the students who testified that their rooms on the first floor were not on fire when they sought to make their escape, I had no difficulty in accepting PW3’s evidence that the fire originated from the roof.

According to the PW3, since the fire originated from the roof void, there were only two plausible causes, ie electrical fault or ignition of part of the roof structure by a stray firework. Two possible causes were resistive heating or short circuit. He ruled out a short circuit as there was no evidence of a blown fuse. Resistive heating results from a dirty or loose connection in an electrical circuit, and the amount of heat generated would depend on the electrical rating of the appliance connected to the circuit. In the instant case, the only appliances capable of generating this sort of fault were the water heaters, of which only the one in the Form 6 room was working.

There is no dispute that spent fireworks were found in the grounds and that the fire occurred in the Chinese New Year period. Based on the evidence, PW3’s opinion as to the two plausible causes of the fire was reasonable and unchallenged, and I accept it. The plaintiffs conceded that they do not lay the blame for causing the fire at the defendants’ door. However, they argue that the defendants were under a duty to take certain measures to prevent or minimize damage and injury due to the fire. There is no dispute that the building was in existence even before 1922. PW3 was the only witness to express any opinion as to the fire resistance of the building. He defined fire resistance to mean the period for which the structure will retain its structural integrity and maintain the temperature on the non-exposed side of that structure at a temperature low enough not to create a hazard on the other side. In the context of that definition, he was of the view that each element of the structure had a fire resisting period of very much less than an hour. He volunteered the opinion that a fire test would have to be done to determine the precise fire resisting period but he



Page 294>>estimated that the timber floor had a fire resisting period of ¼ hour, based on his experience. This was not challenged and I accepted it.

There was only one staircase leading from the upstairs hall to the ground floor. It did not qualify as a final exit as it did not discharge one to safety outside the building. The only staircase which gave direct access to a final exit was adjacent to the Forms 3 and 4 rooms, but this had been permanently sealed with floorboards (photos 20–22). PW3 was of the opinion that if it had not been sealed off, there may have been no loss of life as all the fatalities occurred among the occupants of those two rooms who had desperately tried to seek an exit. From the photographs, the staircase appeared relatively intact. All the windows had been rifted with fixed grilles or BRC mesh except for one marked ‘T’ on P1B (on the first floor) from which PW2 jumped. There were no other secondary exits although there was no shortage of exits on the ground floor. It is undisputed that there were three dry powder fire extinguishers, two on the ground floor and one on the first floor but according to PW3, they were not placed on exit routes except for the one in the kitchen, which could arguably be said to be so placed. PW3 testified that had he been asked to do a fire survey, he would have recommended a total of nine fire extinguishers per floor, including water extinguishers. Rather than an open staircase, there should have been at least two protected staircases from the first floor. There should also have been a hose reel with a reliable supply of water and smoke detectors at ceiling level on both floors and in the roof void. As the building was to be used as a hostel for students aged between 15–17, it was especially important that they be given fire drills, taught to use fire fighting equipment and acquainted with escape routes. There was no emergency lighting in the entire building. It is common ground that although they had occupied the premises for more than one year before the fire, the first defendant had never conducted any fire drills or taught the boys how to use the fire extinguishers.

It could hardly be said that fire was not a foreseeable risk. Indeed DW2 was clearly aware of such a risk since he had installed the fire extinguishers and had them serviced. In the approval letter of the MPPP (p 19 of Bundle A), condition (e) was that the premises were to be used as a hostel ‘dan kegunaannya tertakluk kepada kelulusan daripada jabatan-jabatan yang berkenaan termasuk penukaran kegunaan serta keperluan dari segi perlindungan kebakaran, jika perlu’. It was undisputed that DW2 did nothing to comply with this condition and the MPPP did nothing to ensure compliance. DW2 did not consult the Fire Department regarding fire prevention measures although he did comply with condition (f) by taking out fire insurance. DW2 merely assumed that the approval of his application by the MPPP meant that it was safe and suitable for its intended use. He also admitted that neither of the wardens was given any instructions regarding fire safety.

In the case of Government of Malaysia & Ors v Jumat bin Mahmud & Anor [1977] 2 MLJ 103, the Federal Court held that (at p 104):



… by reason of the special relationship of teacher and pupil, a school teacher owes a duty to the pupil to take reasonable care for the safety of the pupil. The



Page 295>>duty of care on the part of the teacher to the plaintiff must commensurate with his/her opportunity and ability to protect the pupil from dangers that are known or that should be apprehended and the duty of care required is that which a careful father with a very large family would take care of his own children.



Applying this principle to the facts, I found that the first defendant having undertaken to accommodate the students in the premises was under a duty to protect them from known dangers or those that should be apprehended. For the reasons set out, the danger from fire was definitely one which was foreseeable, and had the first defendant taken the steps or perhaps even some of the measures on fire prevention recommended by PW3, damage could have been minimized, if not averted. It was obvious from the evidence of the students that they only became aware of the fire after it had been burning for some time. Had an alarm been installed, they may have been aware of it earlier and gained valuable time in ensuring a safe exit. Doubtless, PW3’s recommendations may have been given with the benefit of hindsight, but in my view, some of the measures should have been taken had the persons in charge applied their minds to the risk of fire or obtained the advice of the Fire Department. On the facts and the law, I found the first defendant negligent and liable to the plainfiffs.

I also accepted the submissions of learned counsel for the plaintiffs that the first defendant was liable under the head of occupier’s liability. The case of Maclenan v Segar [1917] 2 KB 325 was relied on. There it was held that:



Where the occupier of premises agrees for reward that a person shall have the right to enter and use them for a mutually contemplated purpose, the contract between the parties (unless it provides to the contrary) contains an implied warranty that the premises are as safe for that purpose as reasonable care and skill on the part of any one can make them. The rule is subject to the limitation that the defendant is not to be hold responsible for defects which could not have been discovered by reasonable care or skill on the part of any person concerned with the construction, alteration, repair or maintenance of the promises.



Applying this principle to the facts, the first defendant was also liable for breach of the warranty that the premises were as safe for the purpose of a hostel as reasonable care and skill on the part of anyone could make them.

The plaintiffs also submitted that the first defendant had contravened the provisions of the Uniform Building By-Laws 1986 (‘the UBBL’). It was further submitted that the second defendant being the enforcement authority of the UBBL was liable to the plaintiffs for failing to enforce it. It is common ground that the UBBL came into force for the State of Pulau Pinang on 1 January 1986. Parts VII, VIII and IX and the Schedules of that statement deal with fire requirements and the issue in dispute is whether these apply to the said premises.

By-law 254 reads:



Buildings which on the date of commencement of these By-laws have been erected, or in the course of being erected or have not been erected but plans



Page 296>>have been submitted and approved, and which according to by-law 134 fall within the classification of Place of assembly, Shop, Office, Other.



Residential and buildings exceeding 18.5m and buildings which are classified as hazardous or special risks shall be modified or altered to comply with Parts VII and VIII of these by-laws within:

(a) one year from the date of commencement of these by-laws in the case of buildings up to three storeys; and

(b) three years from the date of commencement of these by-laws in the case of buildings exceeding three storeys.



Learned counsel for the second defendant submitted that the by-law must be read conjunctively. This leads to the situation that Parts VII and VIII can only apply to buildings which fall within one of the classifications under by-law 134, exceed 18.5m in height and are classified as hazardous and special risks. Several authorities were submitted on the interpretation of statutes. In Magor and St Mellons Rural District Council v Newport Corporation [1952] AC 189, the House of Lords held that the duty of the court is to interpret the words which the legislature has used; ‘those words may be ambiguous, but even if they are, the power and duty of the court to travel outside them on a voyage of discovery are strictly limited’. Also, in the case of Commissioner of Stamps, Straits Settlements v Oei Tjong Swan & Ors [1933] Vol II SSR 107, His Lordship, Lord Macmillan in delivering the judgment of the Privy Council observed that the best and safest guide to the intention of the legislature is afforded by what the legislature said.

Even applying the principle in these cases, I am of the view that the by-law should be read disjunctively as there would otherwise be no need to repeat the word ‘building’ after the second and third ‘and’. By contrast, there is no ‘building’ after the first ‘and’; so that there are three distinct categories of buildings.

In the case of Public Prosecutor v Sharikat Perusahaan Makanan Haiwan Berkerjasama-sama [1969] 2 MLJ 250, reg 5 of the Food Control (Rice Milling) Regulations 1950 made under the BMA Food Control Proclamation, fell under consideration. The regulation reads:



No person shall work or operate any mill driven by a machine or an engine for the purpose of milling padi into rice or for polishing rice save under and in accordance with the terms and conditions of a licence issued in that behalf.



It was agreed that a regulation under the BMA Food Control Proclamation must be consistent with the Control of Supplies Act 1961, in order to have any force at all.

Section 6(1) gives the minister power to make regulations to carry into effect the provisions of the Act and s 6(2)(i) authorizes him to regulate and control the ‘milling of padi and the polishing of rice and the sale thereof’. It was argued for the respondents that the use of the word ‘and’ in s 6(2)(i) between the words ‘milling of padi’ and ‘the polishing of rice’ and again repetition between the words ‘the polishing of rice’ and the ‘sale thereof’ indicates that the word ‘and’ was to be read conjunctively. In other words, the regulation and control must relate to that whole and unbroken process



Page 297>>of milling, polishing and sale. Sharma J rejected the argument and observed that it ignored the provisions of s 6(1) and the opening words of s 6(2) of the Act. His Lordship held that ‘it was occasionally necessary to read the conjunction “and” as if it were “or” so that the meaning and the intent of the legislature can be carried out.’

In the instant case, as rightly pointed out by learned counsel for the plaintiffs, reading the word ‘and’ in by-law 254 conjunctively would mean that the UBBL would not apply to a building carrying out the most hazardous operations if, for example, its height did not exceed 18.5m. This would be contrary to the intent of the legislature as the UBBL clearly aim to promote fire prevention and safety. Following the case of Syarikat Perusahaan Makanan Haiwan Berkerjasama-sama, this is one of the cases where the word ‘and’ must be read as ‘or’ to carry out the meaning and intention of the legislature.

In my view, the premises in question fall into the first category. There is no dispute that they were built before 1922 and there are approved plans in respect of them.

By-law 134 provides, inter alia, that:



For the purpose of this Part every building or compartment shall be regarded according to its use or intended use as falling within one of the purpose groups set out in the Fifth Schedule of the By-law ….



The Fifth Schedule designates five purpose groups. Counsel for the second defendant argues that the premises fall within the first purpose group, ie ‘small residential’ which covers private dwelling houses. In this case, there is no doubt that the house was used as a hostel.

The plaintiffs rely on the case of Hobson v Tulloch [1898] 1 Ch 424, in which it was held that a covenant not to use a home ‘for any trade or manufacture, or for any other purpose other than a private residence’ was broken by using it as a boarding house for scholars attending a school in the neighborhood kept by the owner of the house in question. It was held that such user converts the house from private residence to the business of boarding house.

The facts are on all fours with those in the instant case. By using the house as a hostel for the students attending the school run by the first defendant, the first defendant had converted the house to the business of boarding house. On the facts, the premises did not fall under group II, IV or V, but clearly fall within category III, ie ‘other residential’ since it was used as accommodation for residential purpose other than any premises comprised in groups I and II. It follows that Parts VII and VIII of the UBBL applied to the premises, yet there was clearly no attempt by either defendant to comply with its requirements.

By-law 166 provides that except as provided by by-law 167, there shall be not less than two separate exits from each storey. By-law 167 provides that except as provided for in by-law 194, there shall be at least two storey exits for every compartment. ‘Storey exit’ is defined in by-law 133 and means a fire rated door to a protected staircase or a corridor protected with



Page 298>>fire resisting structure in accordance with the Ninth Schedule. In the instant case, there was no protected staircase or corridor as prescribed. By-law 194 has no application to this case. Even if it can be proved that the top most floor does not exceed 12m in height, the premises were not used for any occupancy other than for domestic or office purposes. It was used for the business of a boarding house. Although PW3 had expressed the opinion that the fire resisting period of each element of the structure was much less than an hour, no tests had been done in accordance with BS 476; Part 1:1953 (see by-law 133). Nonetheless, since at least one of the conditions of by-law 194 had not been complied with, the by-law did not apply.

There were no emergency exit signs in the premises as required by by-law 172. There were no means of detecting fire (see by-law 225(1)). Fire extinguishers were not in prominent positions on exit routes (see by-law 227). Water storage capacity and water flow rate for fire fighting systems in accordance with the Tenth Schedule were required by by-law 247. In the Tenth Schedule, the requirements were set out according to the category of use and category ‘Other Residential’ was further divided into sub-groups including ‘2. Hostels and Dormitories’. This is clearly the category into which these premises fall. For two to three-storey buildings in that category of use, there is a requirement for a hose reel, a manual electrical fire alarm system and single point unit emergency illumination. PW3 had testified that there was no hose reel, worse still, the water pressure was too low, there was no more than a drip from the taps in the Form 4 bathroom when the students tried to obtain water on the night of the fire. Indeed, the problem of low water pressure had been brought to the attention of the landlord, the MPPP by letter D26 and a reply given by letter D28 dated 19 November 1987. In spite of awareness of this problem, nothing was done by either party to ensure that there was water storage required for the hose reel as set out in the Tenth Schedule. There was also no emergency power system as required by by-law 253.

It is clear from the submissions for the second defendant that there was no need to comply with the UBBL because the premises were to be classified under the purpose group ‘small residential’, and the provisions did not apply. For the reasons stated, I am of the opinion that their classification was wrong.

I accept the submission for the plaintiffs that the second defendant was liable for the injury and damage caused by their failure to enforce the provisions of the UBBL in their capacity as local authority entrusted with that responsibility and also in their capacity as landlord.

In the case of Tok Jwee Kee v Tay Ah Hock & Sons Ltd & Town Council, Johore Bharu [1969] 1 MLJ 195, the plaintiff claimed a declaration that the approval of the building plans by the Johore Town Council was contrary to the Town Boards Enactment. He also sought damages against the council and the owner of the land on which the building was built. It had been alleged that there had been a breach of building by-laws but the only damage alleged was damage to the appellants property from failing cement plasters. The Federal Court considered the provisions of the Town Boards



Page 299>>Enactment and the by-laws made thereunder. Section 145 provided that the Board shall refuse to approve the plan of any new building unless it was in conformity with the approved plan. The Federal Court hold that the prohibition in s 145 is clearly a statutory duty imposed on the council and the council is liable in damages for breach of that duty if it is thought that the duty is for the benefit not of the public generally but of individuals or of a particular or definable class of the public, provided that the Enactment provides no remedy, civil or criminal for such a breach. It was also held that the same principle applies to the by-laws. On the facts of the case, it was held that the duty imposed by s 145 is owed not to the public, but to a broad class — a particular definable class of the public of which the plaintiff was one.

In the instant case, the UBBL were made in accordance with the provisions of the Street Drainage and Buildings Act 1974. It cannot be denied that the MPPP as the local authority must be under a statutory duty to enforce the Act and its by laws although there is no provision in such clear terms as s 145 in Tok Jwee Kee’s case. It was also the owner and landlord. Following Tok Jwee Kee’s case, it can also be said that they owed a duty to a particular definable class of the public, ie the occupants of the premises in question, to ensure compliance with the UBBL.

Learned counsel for the first defendant and the plaintiffs also relied on the case of Anns & Ors v London Borough of Merton [1977] 2 AER 492, in order to attach liability to the second defendant. In that case, the plaintiffs claimed damages against the council for negligence by the servants or agents in approving the foundations on which a block of maisonettes had been erected and/or in failing to inspect the foundations. The House of Lords considered whether the council were under a duty of care towards the plaintiffs who were lessees of the maisonettes which had suffered from various defects. It was held that although the Public Health Act 1936 and the by-laws did not impose a duty on the council to inspect the foundations, it did not follow that a failure to inspect could not constitute a breach of the common law duty of care; it was the duty of the council to give proper consideration of the question whether they should inspect or not. The council would be liable to the plaintiffs if it were proved that in failing to carry out an inspection, they had not properly exercised their discretion and had failed to exercise reasonable care in their acts or omissions to secure that the by-laws applicable to the foundations were complied with.

Ann’s case was overruled by the House of Lords in Murphy v Brentwood District Council [1990] 2 All ER 908 but only insofar as to say that a local authority was not liable in negligence to a building owner or occupier for the cost of remedying a dangerous defect in the building which resulted from the negligent failure of the authority to ensure that the building was designed or erected in conformity with the accepted standards prescribed by the building regulations or by-laws but which became apparent before the defect caused physical injury, because the damage suffered in such circumstances was not material or physical damage but the purely economic loss of the expenditure incurred in remedying the defect to avert the danger or in abandoning the building. In the instant case, the loss suffered by the



Page 300>>plaintiffs was certainly not purely economic but material and physical damage.

The second defendant sought alternatively to rely on s 95(2) of the Street, Drainage and Building Act 1974:



The local authority (D2) or officer or employee of the local authority shall not be subject to any action, claim, liabilities or demand whatsoever arising out of any building or other works carried out in accordance with the provisions of this Act or any by-laws made thereunder (UBBL 1986) or by reason of the fact that such building works or the plans thereof are subject to inspection and approval by the local authority and nothing in this Act or any by-laws made thereunder shall make it obligatory for the local authority to inspect any building, building works or materials to ascertain that the provisions of this Act of any by-laws made thereunder are complied with.



After studying the provision, I agree with learned counsel for the plaintiff that the immunity conferred by the section is in relation to ‘works carried out in accordance with the provisions of this Act or any by-laws made thereunder’. As no works were carried out in respect of this case nor any plans submitted, the section is not applicable.

Had the second defendants ensured compliance with the UBBL, there is little doubt that all the occupants could have escaped death if not injury. As pointed out, a fire alarm would have alerted them much earlier. If there had been a second staircase, the Forms 3 and 4 boys could have used that since they were misled by the glow from the hall in presuming that the main staircase was on fire. A hose reel with the required water storage capacity could have proved vital in fighting the fire, as would fire extinguishers strategically placed.

In the circumstances of the fire, it was inevitable that the boys panicked. PW2 described their efforts in trying to break open the BRC mesh at the windows. Their efforts to obtain water faded as there was no water from the taps. Ultimately, PW2 jumped from the first floor window marked ‘T’ in P1B. In the circumstances, he could not be blamed for not failing to make a more timely escape nor could he have been held contributorily negligent for the injuries suffered by him, which were incurred directly as a result of his trying to escape.

On the evidence, the boys had acquitted themselves as well as could be expected and certainly better than the two adults charged with looking after them. PW1 said that both wardens were in a state of panic. Both pushed their motorcycles from the house. Although DW1 testified that Frederick Augustin tried to use a fire extinguisher but failed, there was no evidence that he helped the boys to escape in any way. PW5 confirmed that it was one of the other boys, William, who urged him to run out of the house, which he did in spite of the thick smoke outside his room. He saw neither DW1 nor Frederick Augustin shouting at the boys to tell them to get out. This was left to PW1 and the boys who had escaped. DW1 was more intent on saving his belongings than his charges. He was mindlessly removing his belongings even as PW2 called to him for help in moving him away from the house after jumping down from the window. When even adults had reacted



Page 301>>as DW1 had done, there can surely be no criticism levelled against teenaged boys who, though terror stricken had done their best to save themselves. They had never participated in any fire drills nor been given any instructions on what to do in the event of a fire. In the circumstances, I found no contributory negligence against the plaintiffs, and found both defendants equally to blame, as submitted by learned counsel for the plaintiffs and the first defendant.

Quantum

Cases 53–26, 27, 28 and 33–92 involve fatalities and it was agreed that on proof of 100% liability the plaintiffs in each of the cases were entitled to RM10,000 as bereavement apart from Surin Thinagaran whose charred body was found at the scene, the other three boys only died after a lapse of time. However, there was no evidence as to whether they were in a coma or underwent pain and suffering. There being no claim under this head, no award was made for pain and suffering (see Thangavelu v Chia Kok Bin [1981] 2 MLJ 227). Agreed special damages in each of the cases were RM3291.50, RM3040.50, RM5040.50 and RM12,500 respectively. In 53–26–92, item 4 of the special damages was disputed although there is no dispute that the plaintiff had paid PW3 the sum of S$13,296.20 for the preparation of his report, P5. P5 was a comprehensive report supported by photographs and plans relied on not only by the plaintiffs but also by the defence. It was invaluable in assisting the court to form conclusions about the fire. The other reports D29 and D32 were certainly not of much assistance as they were not as detailed or lucid. I am of the view that the expense incurred was not excessive for the degree of expertise that it bought and I allowed it.

53–25–92–(Yong Yit Swee)

The plaintiff suffered burns on 50% of his body and underwent six operations. He carries permanent scars on the front and back of the trunk of his body and on all four limbs. He suffers permanent disabilities set out in P13, P14 and P25. In the case of Pengarah Institut Penyelidikan Perubatan & Anor v Inthra Devi & Anor [1988] 1 MLJ 19, the plaintiff sustained 65% first and second degree burns involving parts of the face, trunk, both thighs and both upper limbs. She underwent surgery on two occasions where areas with skin loss were covered with skin graft. She developed keloid scars on almost the whole of the front of the body left upper limb, both thighs and areas behind the knees and legs. She would require RM3,000–RM5,000 annually for surgical rehabilitation. She was also found to require indefinite psychiatric therapy throughout her life. She was awarded RM80,000 for general damages apart from awards for plastic surgery and the cost of psychiatric therapy.

Applying that case, I awarded the sum of RM70,000 as general damages. The injuries and disabilities are comparable to those in Inthra Devi’s case. Moreover, Inthra Devi’s case was decided eight years ago and



Page 302>>the effects of inflation should be considered. In the circumstances, the award was not excessive.

53–29–92 (Lee Seng Choong)

The plaintiff suffered 50% third degree burns and underwent six operations — P15 and P24 referred to. P15 mentions the severe pain and suffering he had undergone. He has thick scars over both sides of his neck, on his chest and both thighs. He has contractures of the neck, both hands, ankles and feet. His hands are severely deformed. There are permanent disabilities. Applying Inthra Devi’s case, I awarded RM80,000 for the burns, scars and associated disabilities.

For the loss of his right little finger, and the severe contracture of his right hand, I assessed the sum of RM30,000 based on the case of Mat Jusoh bin Daud v Syarikat Jaya Seberang Takir Sdn Bhd [1982] 2 MLJ 71. In that case, the plaintiff was awarded RM15,000 for pain and suffering and loss of amenities, associated with the loss of two middle fingers and part of the index finger of the right hand. This case was decided in 1982, more than 13 years ago and in view of the plaintiffs injuries and disabilities which were more serious, I awarded the sum of RM30,000. Total general damages of RM110,000 were awarded. Agreed special damages of RM7151.20 were also awarded.

53–30–92 (Vigneshwara)

He suffered superficial to deep dermal or full thickness burns on 30% of his body with keloid scars on both arms and some limitations of movement of his left hand. He has undergone two operations (P16 and P17 referred to). In the case of Low Mei Yong (An Infant) (Spinster) suing by her mother and next friend Ng Chen Fong (mw) v Yeoh Geok Keow (mw) (Dass on Quantum in Accident Claims, Vol III, 374, the four year old plaintiff sustained 4% friction burns over her right upper thigh which required skin grafting. Apart from some hypertrophic scars, there was no other disability. She was awarded general damages of $9500 in 1982.

In this case, the plaintiff’s burns covered a far greater part of his body and left keloid scars. He also had some limitation of movement which was not suffered by the plaintiff in Low Mei Yong’s case, which is a 13 year old decision. In the circumstances, I awarded a sum of RM30,000 for general damages and RM14,578 agreed special damages.

53–31–92 (Yap Lip San)

He suffered 70% body burns and underwent six operations (exh P18 refers). There is no doubt his injuries were serious but there was no evidence of any residual disabilities. Based on the authority referred to in 53–25–92, he was awarded general damages of RM50,000 based on the case of Low Mei Yong. His burns covered a greater portion of his body compared to the plaintiff in Low Mei Yong’s case and the award is justifiably greater.



Page 303>>

For the closed fracture of the neck of the femur associated with four operations and 3cm shortening, I awarded the sum of RM26,000 (exhs P19, P20, P21 and P22 referred to). In Victor Alphonse Sebastian & Ors v Lee Ah Leek [1987] 2 MLJ xxi, general damages of RM33,000 were awarded for a fracture of the right midshaft femur with 1.5cm shortening, inability to squat and pain in his right knee.

I awarded the sum of RM26,000 as general damages for pain and suffering and loss of amenities, as the disabilities were fewer although the shortening was more.

Learned counsel for the second defendant had submitted that the injury to the femur was too remote. I rejected this submission as I found that the fracture was directly related to his attempt to escape the fire. He had jumped to effect a hasty escape which was what the second defendant demanded of the teenaged occupants and they should not be heard to argue that the damage caused in such attempt was too remote. Agreed special damages of RM6,000 were also awarded.

In my view, the damages awarded were not excessive but reasonable, in view of the facts and authorities. Interest on general damages was awarded at 8%pa from the date of service of summons till the date of judgment while that on special damages was 4% per annum from the date of accident till date of judgment. Interest on the judgment sum was awarded at 8%pa from the date of judgment till satisfaction. Costs were also awarded.

Sunday, March 14, 2010

Sri Inai (Pulau Pinang) Sdn Bhd v Yong Yit Swee & Ors*

Sri Inai (Pulau Pinang) Sdn Bhd v Yong Yit Swee & Ors*

Headnote

Court Details

COURT OF APPEAL (KUALA LUMPUR) — CIVIL APPEAL NO P–04–8 OF 1998

GOPAL SRI RAM, ABDUL KADIR SULAIMAN AND ALAUDDIN JJCA

19 NOVEMBER 2002

Catchwords

Civil Procedure — Judicial precedent — Federal Court — Decision of High Court overlooked relevant decision of Federal Court — Whether High Court had acted contrary to the doctrine of precedent



Tort — Negligence — Duty of care — Whether discharge of such duty dependent on facts of particular case — Whether degree of care dependent on magnitude of risk — Assumption of responsibility to perform professional or quasi-professional services for plaintiff relying on such services — Whether duty of care to be imposed — Assumption of responsibility and factum of reliance may be express or inferred from circumstances of each case



Tort — Negligence — Duty of care — Whether pre-existing contractual relationship necessary for duty of care to arise



Tort — Occupier’s liability — Duty of care — Nature, scope and extent of duty owed by landlord to lawful visitors of his tenant



Tort — Occupier’s liability — Duty of care — Whether duty of care owed by landlord of premises to lawful visitors of tenant

Summary

[* The judgment of the learned sessions court judge, Ho Mooi Ching, is published immediately after this Court of Appeal judgment. See p 290.The first defendant (appellant) — a school, rented an old dwelling house from the second defendant (tenth respondent) — a local authority.] The first defendant rented the house which belonged to the second defendant for use as a hostel to accommodate some of its students. The second defendant despite knowing that young children would live in the old house, did nothing to upgrade the building to ensure that it was safe for use as a hostel by young children. Subsequently a fire broke out in the house claiming the lives of several children and causing serious injury to others. An action was filed in the sessions court against the defendants in respect of the accident and at the conclusion of its trial, the sessions court judge found the defendants equally liable for the deaths and injuries caused by the fire. The first defendant appealed to the High Court contending that the second defendant should be held solely liable. The second defendant cross-appealed for the same purpose. The High Court however dismissed the appeal, allowed the cross appeal and awarded costs against the plaintiff. Whilst the High Court accepted the findings of fact made by the sessions court judge, it found for the second defendant purely on a point of law. The High Court decided that as a matter of law the second defendant whether as a landlord or a local authority owed no duty of care to the plaintiffs. The first defendant thus appealed to the Court of Appeal with leave.

Holdings

Held, allowing the appeal, setting aside the order of the High Court and restoring the order of the sessions court:

(1) Whether the duty of care has been discharged in a given case depends on a number of factors present or absent on the peculiar fact pattern of the particular case. In other words, the degree of care that ought to be exercised depends among other matters on the magnitude of risk to which a plaintiff is exposed in particular circumstances. Presently, the law of tort imposes a duty of care on a defendant who assumes responsibility to perform professional or quasi-professional services for a plaintiff who relies on those services. In such cases the relationship between the parties is itself sufficient without more to give rise to a duty on the part of the defendant to exercise reasonable skill and care in doing so. The assumption of responsibility and the factum of reliance may be either express or may reasonably be inferred from the circumstances of the particular case. In the instant case, the sessions court judge would have been entirely justified in finding liability against the first defendant on the basis that it had assumed responsibility for the safety of the innocent pupils while they resided at the hostel and the latter had in turn relied on the former to make the hostel reasonably safe (see pp 281C–D, H, 282A–B); Government of Malaysia & Ors v Jumat bin Mahmud & Anor [1977] 2 MLJ 103 and Mohamed Raihan bin Ibrahim & Anor v Government of Malaysia & Ors [1981] 2 MLJ 27 followed; Hedley Byrne & Co v Heller & Partners [1964] AC 465; Smith v Eric S Bush [1989] 2 All ER 514 and Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 referred.

(2) In Malaysia, the Federal Court decision of Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 accepted the proposition that Donoghue v Stevenson [1932] AC 562 overrides cases that preceded it where courts insisted upon a pre-existing contractual relationship in order for a duty of care to arise. It is entirely up to our courts to develop our common law jurisprudence according to the needs of our local circumstances. This is in keeping with the common law tradition (see p 285D–E); Invercargill City Council v Hamlin [1996] 1 All ER 756 and Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 followed. Following the jurisprudence encapsulated in the case of Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283, a landlord of premises stands in sufficiently close proximity to the lawful visitors of his tenant. In accordance with Malaysian common law, a landlord of premises owes a duty of care to the lawful visitors of his tenant (see p 286A, C–D); Cavalier v Pope [1906] AC 428 distinguished; AC Billings & Sons Ltd v Riden [1958] AC 240 and Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 followed; Travers v Gloucester Corporation [1947] 1 KB 71 and Sutherland Shire Council v Heyman [1985] 157 CLR 424 referred.

(3) The nature, scope and extent of the duty owed by a landlord to the lawful visitors of his tenant is to ensure that the premises that are let out are safe for the purposes for which they are meant to be used and the defect complained of by the entrant must be a defect of which the landlord had knowledge or means of knowledge (see pp 286D–287C); Jones v Bartlett [2000] HCA 56 followed.

(4) The evidence on record showed that the second defendant, despite being a local authority whose duty it was to enforce compliance of the Uniform Building By-Laws 1986 (‘the By-Laws’), did not comply with those very By-Laws when letting out the building in question to the first defendant. It did not take any steps to meet the requirements of the By-Laws in respect of the availability of a safe exit for occupants in the event of a fire. It was well aware that the building was to be used as a hostel for young children. In such circumstances the second defendant was not a bare landlord. It exposed the plaintiffs to the risk of injury by its failure to comply with the relevant By-Laws. It knew the purpose for which its property was to be used. It was also well aware of the harm that would ensue to the children by reason of the absence or inadequacy of fire escape exits. Accordingly, the second defendant as the landlord of the premises in question owed a duty of care to the lawful visitors of its tenant and was in breach of that duty (see pp 287F–288B); Donoghue v Stevenson [1932] AC 562 and Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 followed.

(5) The High Court erred in important respects. By refusing to apply AC Billings & Sons Ltd v Riden [1958] AC 240 on the ground that it was a case decided after the coming into force of the Civil Law Act 1956, it overlooked the decision of the Federal Court in Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 which applied AC Billings and was a decision binding on it. The High Court had thus acted contrary to the doctrine of precedent. The High Court’s interpretation of s 3 of the Civil Law Act 1956 did not also accord with the decision of Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 which decision was also binding on it. As an appellate court will not disturb the apportionment of liability for an accident made by the trial court except in the rarest of cases — and the present case was not such a case — the apportionment of equal liability by the sessions court had to be restored. The High Court had found the first defendant 100% liable on a ground of law with which the Court of Appeal could not agree (see pp 288E–F, 289C–D); AC Billings & Sons Ltd v Riden [1958] AC 240; Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 and Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 followed.

Bahasa Malaysia summary

Defendan pertama (perayu) — sebuah sekolah, telah menyewa sebuah rumah kediaman lama daripada defendan kedua (responden kesepuluh) — satu badan berkuasa. Defendan pertama telah menyewa rumah tersebut yang dimiliki oleh defendan kedua untuk digunakan sebagai sebuah asrama bagi menempatkan beberapa orang penuntutnya. Defendan kedua walaupun mengetahui bahawa budak-budak akan tinggal di rumah lama tersebut, tidak membuat apa-apa pembaikan ke atas bangunan tersebut bagi memastikan ia selamat untuk digunakan sebagai sebuah asrama untuk budak-budak. Selepas itu satu kebakaran telah berlaku dalam rumah tersebut yang meragut nyawa beberapa orang budak tersebut dan menyebabkan yang lain mengalami kecederaan serius. Satu tindakan telah difailkan di mahkamah sesyen terhadap defendan-defendan berhubung kemalangan tersebut dan di penutup perbicaraannya, hakim mahkamah sesyen mendapati defendan-defendan bersama-sama bertanggungjawab atas kematian dan kecederaan akibat kebakaran tersebut. Defendan pertama telah merayu ke Mahkamah Tinggi dengan menghujahkan bahawa defendan kedua sepatutnya menanggung tanggungjawab sepenuhnya. Defendan kedua telah membuat rayuan balas bagi tujuan yang sama. Mahkamah Tinggi bagaimanapun telah menolak rayuan tersebut, membenarkan rayuan balas tersebut dan mengawardkan kos terhadap plaintif. Walaupun Mahkamah Tinggi menerima penemuan-penemuan fakta yang dibuat oleh hakim mahkamah sesyen, ia berpihak kepada defendan kedua semata-mata berdasarkan undang-undang. Mahkamah Tinggi telah memutuskan bahawa berdasarkan undang-undang defendan kedua sama ada sebagai tuanpunya tanah atau satu badan berkuasa tidak mempunyai kewajipan berjaga-jaga ke atas plaintif-plaintif. Defendan pertama oleh itu telah merayu ke Mahkamah Rayuan dengan kebenaran.

Bahasa Holdings

Diputuskan, membenarkan rayuan tersebut, mengenepikan perintah Mahkamah Tinggi dan mengekalkan perintah mahkamah sesyen:

(1) Sama ada kewajipan berjaga-jaga telah dilepaskan dalam suatu kes bergantung kepada faktor-faktor yang wujud atau tiada dalam corak fakta khusus kes tertentu. Dalam perkataan lain, tahap berjaga-jaga yang patut ada bergantung kepada, antara perkara lain, besarnya pendedahan plaintif terhadap risiko-risiko dalam keadaan-keadaan yang tertentu. Pada ketika ini, undang-undang tort mengenakan satu kewajipan berjaga-jaga ke atas defendan yang menerima tanggungjawab untuk melaksanakan khidmat profesional atau quasi-profesional untuk plaintif yang bergantung kepada khidmat tersebut. Dalam keadaan demikian, hubungan antara pihak-pihak adalah dengan sendirinya mencukupi tanpa perlu menimbulkan satu kewajipan di pihak defendan untuk mengambil sikap mahir dan berjaga-jaga yang munasabah semasa berbuat demikian. Penerimaan tanggungjawab dan faktor pergantungan boleh dinyatakan atau boleh disimpulkan daripada keadaan-keadaan kes tertentu. Dalam kes semasa, hakim mahkamah sesyen mempunyai justifikasi dalam penemuan liabiliti terhadap defendan pertama berdasarkan ia telah menerima tanggungjawab untuk keselamatan penuntut-penuntut yang tidak bersalah semasa mereka menetap di asrama tersebut dan penuntut-penuntut tersebut juga bergantung kepada defendan pertama untuk menjadikan asrama tersebut selamat untuk diduduki (lihat ms 281C–D, H, 282A–B); Government of Malaysia & Ors v Jumat bin Mahmud & Anor [1977] 2 MLJ 103 dan Mohamed Raihan bin Ibrahim & Anor v Government of Malaysia & Ors [1981] 2 MLJ 27diikut; Hedley Byrne & Co v Heller & Partners [1964] AC 465; Smith v Eric S Bush [1989] 2 All ER 514 dan Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 dirujuk.

(2) Di Malaysia, keputusan Mahkamah Persekutuan dalam Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 menerima kenyataan bahawa Donoghue v Stevenson [1932] AC 562 mengatasi kes-kes yang sebelumnya di mana mahkamah menegaskan perlunya satu hubungan kontraktual wujud sebelum satu kewajipan berjaga-jaga timbul. Ia terpulang sepenuhnya kepada mahkamah kita untuk membentuk jurisprudens common law menurut keperluan keadaan tempatan di sini (lihat ms 285D–E); Invercargill City Council v Hamlin [1996] 1 All ER 756 dan Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 diikut. Mengikut jurisprudens yang terkandung dalam Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283, seorang tuanpunya tanah suatu premis mempunyai keadaan berdekatan yang mencukupi terhadap tetamu-tetamu penyewanya yang sah. Menurut common law Malaysia, seorang tuanpunya tanah suatu premis mempunyai satu kewajipan berjaga-jaga kepada tetamu penyewanya yang sah (lihat ms 286A, C–D); Cavalier v Pope [1906] AC 428 dibeza; AC Billings & Sons Ltd v Riden [1958] AC 240 dan Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 diikut; Travers v Gloucester Corporation [1947] 1 KB 71 dan Sutherland Shire Council v Heyman [1985] 157 CLR 424 dirujuk.

(3) Sifat, skop dan setakat mana kewajipan seorang tuanpunya tanah kepada tetamu-tetamu penyewanya yang sah adalah untuk memastikan bahawa premis yang disewakan adalah selamat bagi tujuan ia digunakan dan kerosakan yang diadukan oleh orang yang masuk tersebut mestilah satu kerosakan yang mana tuanpunya tanah mempunyai pengetahuan atau sumber pengetahuan (lihat ms 286D–287C).

(4) Keterangan atas rekod menunjukkan bahawa defendan kedua, meskipun merupakan satu badan berkuasa tempatan yang mempunyai kewajipan untuk menguatkuasakan kepatuhan Undang-Undang Kecil Bangunan Seragam 1986 (‘Undang-Undang Kecil tersebut’), telah tidak mematuhi Undang-Undang Kecil tersebut apabila ia menyewakan bangunan yang dipersoalkan kepada defendan pertama. Ia tidak mengambil apa-apa langkah untuk memenuhi keperluan-keperluan Undang-Undang Kecil tersebut berhubung kewujudan satu jalan keluar untuk penghuni-penghuni jika berlaku kebakaran. Ia juga sedar bahawa bangunan tersebut digunakan sebagai asrama untuk budak-budak. Dalam keadaan sedemikian, defendan kedua bukan seorang tuanpunya tanah kosong. Ia mendedahkan plaintif-plaintif kepada risiko kecederaan oleh sebab kegagalannya untuk mematuhi Undang-Undang Kecil tersebut yang relevan. Ia mengetahui tujuan hartanah tersebut digunakan. Ia juga memang sedar tentang kecederaan yang akan menimpa budak-budak tersebut oleh sebab ketiadaan jalan keluar kecemasan semasa kebakaran yang mencukupi. Sewajarnya, defendan kedua sebagai tuanpunya tanah premis yang dipersoalkan mempunyai kewajipan berjaga-jaga kepada tetamu-tetamu sah penyewanya dan telah melanggar kewajipan tersebut (lihat ms 287F–288B); Donoghue v Stevenson [1932] AC 562 dan Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 diikut.

(5) Mahkamah Tinggi telah terkhilaf dalam aspek-aspek penting. Dalam keengganannya untuk memakai AC Billings & Sons Ltd v Riden [1958] AC 240 atas alasan ia merupakan satu kes yang diputuskan selepas penguatkuasaan Akta Undang-Undang Sivil 1956, ia telah terlepas perhatian tentang keputusan Mahkamah Persekutuan dalam Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 yang memakai AC Billings dan ia adalah satu keputusan yang mengikatnya. Mahkamah Tinggi oleh itu telah bertindak bertentangan dengan doktrin duluan. Tafsiran Mahkamah Tinggi terhadap s 3 Akta Undang-Undang Sivil 1956 juga tidak bersependapat dengan Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 di mana keputusannya juga mengikatnya. Memandangkan satu mahkamah rayuan tidak akan campur tangan dalam pembahagian liabiliti suatu kemalangan yang dibuat oleh mahkamah perbicaraan kecuali dalam kes-kes yang jarang sekali — dan dalam kes sekarang bukan kes sedemikian — pembahagian liabiti yang sama rata oleh mahkamah sesyen harus dikekalkan. Mahkamah Tinggi mendapati defendan pertama bertanggungjawab 100% atas satu alasan undang-undang yang Mahkamah Rayuan tidak bersetuju (lihat ms 288E–F, 289C–D); AC Billings & Sons Ltd v Riden [1958] AC 240; Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 dan Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor diikut.]



Notes

For cases on the duty of care in negligence, see 12 Mallal’s Digest (4th Ed, 2000 Reissue) paras 687–694.

For cases on judicial precedent, see 2 Mallal’s Digest (4th Ed, 2001 Reissue) paras 3611–3612.

For cases on occupier’s liability, see 12 Mallal’s Digest (4th Ed, 2000 Reissue) paras 1186–1189.

Cases referred to

AC Billings & Sons Ltd v Riden [1958] AC 240 (folld)

Cavalier v Pope [1906] AC 428 (distd)

Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 (folld)

Donoghue v Stevenson [1932] AC 562 (folld)

Government of Malaysia & Ors v Jumat bin Mahmud & Anor [1977] 2 MLJ 103 (folld)

Hedley Byrne & Co v Heller & Partners Ltd [1964] AC 465 (refd)

Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 (refd)

Invercargill City Council v Hamlin [1996] 1 All ER 756 (folld)

Jones v Bartlett [2000] HCA 56 (folld)

Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283 (folld)

Mohamed Raihan bin Ibrahim & Anor v Government of Malaysia & Ors [1981] 2 MLJ 27 (folld)

Pyrenees Shire Council v Day (1998) 151 ALR 147 (refd)

Robbins v Jones [1863] 143 ER 768 (refd)

Smith v Eric S Bush [1989] 2 All ER 514 (refd)

Sri Inai (Pulau Pinang) Sdn Bhd v Yong Yit Swee & Ors [1998] 3 AMR 284 (refd)

Stovin v Wise [1996] 3 All ER 801 (refd)

Sutherland Shire Council v Heyman [1985] 157 CLR 424 (refd)

Travers v Gloucester Corporation [1947] 1 KB 71 (refd)

Union of India v United India Assurance Co Ltd AIR 1998 SC 640 (refd)

Legislation referred to

Civil Law Act 1956 s 3(1)

Occupiers Liability Act 1957

Uniform Building By-Laws 1986

Appeal from

Appeal from: Civil Appeal No 12–46 of 1995 (High Court, Pulau Pinang)

Lawyers

Jagdeep Singh Deo (Karpal Singh with him) (Karpal Singh & Co) for the appellant.

M Thayalan (Thayalan & Assoc) for the first to ninth respondents.

Gurbachan Singh (Mohamed Aslam bin Mohamed Mydin and Meyappan with him) (Presgrave & Matthews) for the tenth respondent.

Judgement - Gopal Sri Ram JCA (delivering judgment of the court):

Gopal Sri Ram JCA (delivering 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, Pulau Pinang. 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 Pulau Pinang. 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 letting was for three years. The initial term was for two years from 20 December 1986 until 19 December 1988. This was later extended to 19 December 1989. Throughout the term, the premises were used as a hostel. Young children who attended the first defendant’s school lived there. And that is why they were there on the day of the tragedy.

The judgment of the sessions court

In due course, an action was filed in the sessions court against the defendants in respect of the accident. The second defendant’s position was attacked both in its capacity as a landlord and a local authority. There was a fairly lengthy trial. At its conclusion, the court found for the plaintiffs. In an exceptionally well-reasoned judgment,†[ * dagger; See p 280 for the judgment.] the learned sessions court judge (Ms Ho Mooi Cheng) held the defendants equally liable for the deaths and the injury caused by the fire.

She took the case before her through the correct steps of legal reasoning. First, she carefully analyzed the evidence including that of the expert witness (‘PW3’) called by the plaintiffs. Having done so, she came to the conclusion that the premises were unsafe at the material time. Next, she turned to the law, in particular to the basis on which liability might properly be founded against the first defendant. She held, quite rightly, that the first defendant and its affected pupils stood in a special relationship to each other and that accordingly a duty of care was owed by the former to the latter. In arriving at this conclusion, she correctly directed herself on the law by applying the following dictum of Raja Azlan Shah FJ (as he then was) in Government of Malaysia & Ors v Jumat bin Mahmud & Anor [1977] 2 MLJ 103, at p 104:



It is accepted that by reason of the special relationship of teacher and pupil, a school teacher owes a duty to the pupil to take reasonable care, for the safety of the pupil. The duty of care on the part of the teacher to the plaintiff must commensurate with his/her opportunity and ability to protect the pupil from dangers that are known or that should be apprehended and the duty of care required is that which a careful father with a very large family would take of his own children (see Ricketts v Erith Borough Council [1943] 2 All ER 629, 631). It is not a duty of insurance against harm but only a duty to take reasonable care for the safety of the pupil.



We pause to make two points. First, it must be noted that the aforesaid dictum of Raja Azlan Shah FJ contains a statement in very general terms of the nature of the duty owed by a teacher to his or her pupil. However, whether the duty has been discharged in a given case depends upon a number of factors present or absent on the peculiar fact pattern of the particular case. In other words, the degree of care that ought to be exercised depends, among other matters, on the magnitude of risk to which a plaintiff is exposed in particular circumstances. Thus, as Salleh Abas FJ observed in Mohamed Raihan bin Ibrahim & Anor v Government of Malaysia & Ors [1981] 2 MLJ 27, at p 28:



In conclusion we are of the opinion that having regards to what we have discussed above, the respondents were therefore negligent for failing to take all reasonable and proper steps to prevent the appellant under their care from sustaining the injury and that their teacher did not check the condition of the garden tools nor provided a safe system of holding the gardening class. This is not a case where the teacher, as in the case of Government of Malaysia & Ors v Jumat bin Mohamed & Anor [1977] 2 MLJ 103, had provided sufficient supervision but could not prevent the injury from being inflicted because of the stupidity of a pupil, whose exuberant behaviour was unknown to the teacher. But this is a case where a teacher appreciating that the boys were handling dangerous instruments had not given sufficient warning as to their use nor had she taken steps to see that pupils were positioned within such distance between them as to avoid injuries from being inflicted. There is a world of difference between the use of a changkol and that of a pencil.



The second point we make is this. There has been, at least since the late 1980’s a development in the tort of negligence through a process by which the principle stated in Hedley Byrne & Co v Heller & Partners Ltd [1964] AC 465 in relation to pure economic loss caused by careless statements has been incrementally extended. At present, the law of tort imposes a duty of care on a defendant who assumes responsibility to perform professional or quasi-professional services for a plaintiff who relies on those services. It is important to emphasize that in such cases, the relationship between the parties is itself sufficient, without more, to give rise to a duty on the part of the defendant (who provides the services) to exercise reasonable skill and care in doing so (see Smith v Eric S Bush [1989] 2 All ER 514; Henderson v Merrett Syndicates Ltd [1995] 2 AC 145). It may also be added for good measure that the assumption of responsibility and the factum of reliance may be either express (as in Hedley Byrne & Co v Heller & Partners Ltd) or may reasonably be inferred from the circumstances of the particular case (as happened in Henderson v Merrett Syndicates Ltd).

So too here. The learned sessions court judge, when she wrote her judgment in May 1995, would have been entirely justified in finding liability against the first defendant on the basis that it has assumed responsibility for the safety of the innocent pupils while they resided at the hostel and that the latter had in turn relied on the former to make the hostel reasonably safe.

We return to the sessions court’s judgment. Having found against the first defendant, the learned sessions court judge proceeded to find liability against the second defendant. She appears to have treated the case against this defendant as being a straightforward application of Donoghue v Stevenson [1932] AC 562. It is this part of her judgment that has attracted controversy in the present appeal. Whether she was right in the approach she took is a matter that we will address later in this judgment.

The judgment of the High Court

The first defendant was unhappy with the finding of negligence made against it. It appealed to the High Court. It wanted the second defendant to be held solely liable for the accidental fire. The second defendant cross- appealed for the same purpose. The High Court dismissed the appeal but allowed the cross appeal. It awarded costs against the plaintiffs although they had not appealed and played only a passive role throughout the intermediate appeal. The High Court accepted the findings of fact made by the sessions court. It found for the second defendant purely on a point of law. It held that as a matter of law, the second defendant whether as a landlord or a local authority owed no duty of care to the plaintiffs.

The basis of the High Court’s findings appear sufficiently from its judgment which is to be found in Sri Inai (Pulau Pinang) Sdn Bhd v Yong Yit Swee & Ors [1998] 3 AMR 2847. We will merely summarize the main grounds which the High Court advanced for allowing the second defendant’s cross appeal. These are, first, the second defendant owed no duty to the plaintiffs in its capacity as landlord because of the rule in Cavalier v Pope [1906] AC 428. Second, the common law rules governing an occupier’s liability continue to operate in Malaysia although the position in England had been altered by the Occupiers Liability Act 1957. Third, the decision of the House of Lords in AC Billings & Sons Ltd v Riden [1958] AC 240 had made an inroad into Cavalier v Pope but that decision could not be applied here because it came after 7 April 1956, the determinative date set by s 3(1) of the Civil Law Act 1956 for the application of English common law by our courts. Fourth, that there was no reason to rely on the proviso to s 3(1) to — in the words of the statute — make such qualifications as local circumstances render necessary.

The summary of the High Court’s views on this head of liability appear in the following passage of its judgment (at p 2866):



As can be seen from these authorities, the general rule is that (it appears that in England ‘was’), apart from any express or implied contract, the landlord is under no duty to his tenant or any other person who enters the demised premises during the tenancy, to take care that the premises are safe, whether at the commencement of the tenancy or during its continuance. The lease transfers all obligations towards third parties from the landlord to the tenant.

As a result, the landlord, who can no longer be regarded as the occupier of the demised premises is exempted from liability for any dangers existing on them. In England, one of the first steps in the erosion of this immunity of the lessor came from the decision of the House of Lords in AC Billings & Sons Ltd v Riden [1958] AC 240. (Note the date). In England today, the immunity has largely disappeared, principally in consequence of legislation, namely the Occupiers Liability Act 1957 and the Defective Premises Act 1972 (both English statutes). However the decision in Cavalier v Pope is still the law in England, where the facts fall outside the scope of the said legislation.

This reminds us of the danger of following post-1956 English cases which were in fact based on new legislation there.

In my view the common law on 7 April 1956 is as stated by the learned authors referred to above and as stated in Cavalier v Pope and Bottomley v Bannister. I do not see any reason why I should invoke the proviso to s 3(1) of the Civil Law Act 1956 ‘to make such qualifications as local circumstances render necessary’. (Emphasis added.)



Having negatived the second defendant’s liability as a landlord in tort, the High Court went on to examine whether there was any liability in contract. It held there was none. It also negatived the second defendant’s liability in tort in its capacity as a local authority for failing to enforce the relevant building by-laws in respect of its building.

Against the High Court’s decision, the first defendant has appealed to this court with leave.

Does a landlord owe a duty of care to his tenant’s lawful visitors?

Before us, all points advanced in the courts below were taken. In view of its peculiar importance, we propose to deal with so much of the first defendant’s case that is directed against the nature and extent of the duty of care, if any, owed by the second defendant in its capacity as landlord to the plaintiffs.

The starting point is, of course, Cavalier v Pope. That case concerned a dilapidated house which the owner had let unfurnished to the tenant. There was no written agreement governing the letting. The flooring of the kitchen was in a defective condition and the tenant and his wife threatened to leave. The landlord’s agent promised that, if the tenant stayed, repairs would be made. Some months later, but before any repairs had been made, the wife (the appellant) fell through the kitchen floor. The appellant and her husband brought an action for breach of contract against the landlord. The husband succeeded at trial. But it was the wife’s claim that was the subject of the appeal before the House of Lords. She failed on the basis that she was not privy to the contract of repair between her husband and the landlord’s agent. An examination of the speeches of the Law Lords reveals no reference whatsoever to the tort of negligence.

When dealing with that decision, it is important to bear in mind that the House there was not laying down any new rule. It was merely affirming the decision in Robbins v Jones [1863] 143 ER 768 where Erle CJ said:



A landlord who lets a house in a dangerous state, is not liable to the tenant’s customers or guests for accidents happening during the term; for, fraud apart, there is no law against letting a tumbledown house; and the tenant’s remedy is upon his contract, if any.



In our view, Cavalier v Pope is merely an illustration of the application of the doctrine of privity of contract. It is not a case in tort.

We next turn to AC Billings v Riden [1958] AC 240. We find it sufficient to quote from the headnote of the report:



Contractors reconstructing the front approach to a house in which lived a caretaker and his wife so obstructed the normal approach that it became impassable. Their workmen suggested to the caretaker’s wife that persons might go in and out of the house by using the forecourt of the house next door, a route involving danger because it led through a narrow way between bushes and the unfenced sunk area of the house. On a November evening after dark the respondent, a woman of 71, visiting the caretaker and his wife by invitation, used that way in on the wife’s suggestion. In leaving by the same way; after declining an offer to escort her, she fell into the area next door sustaining injuries:

Held, that the contractors had been negligent and were liable in damages to the respondent, who, although she was guilty of contributory negligence, did not act unreasonably in attempting to use the alternative means of egress.

The contractors owed a duty to all persons who might be expected lawfully to visit the house to take such care as was, in all the circumstances, reasonable to ensure that they were not exposed to danger. Where, as here, the respondent was aware of the danger but, in all the circumstances, a reasonable person would have risked incurring it, the contractors were not absolved from liability either by giving a warning or by reliance on the respondent’s knowledge. In considering what a reasonable person would realise or would do in a particular situation, regard must be had to human nature, and if, in that situation, the great majority of people would behave in one way, it is not right to say that a reasonable man would have behaved in another.



AC Billings v Riden was applied with approval by the former Federal Court in Lembaga Kemajuan Tanah Persekutuan v Mariam & Ors [1984] 1 MLJ 283. Salleh Abas CJ (Malaya) said at pp 284–285:



As to the issue of negligence, Felda did not know that the contractor in breach of the agreement with Felda had sub-contracted the work. Counsel for Felda, therefore, submitted that as the subcontract was unauthorized, the sub-contractor’s employee, ie the deceased, must in the circumstances of the case be a trespasser and as such Felda owed him no duty of care at all.

With respect, we disagree. The submission seems to us to be an attempt to revive a notion which had long been discarded in that tortious liability depends upon contractual relationship and that since Felda and the deceased had no contractual relationship with each other, Felda therefore owed no duty of care to him at all.

This notion was abandoned in England by the House of Lords in Donoghue v Stevenson [1932] AC 562, 580 and it was, to paraphrase Professor Winfield, given a ‘decent burial’ by the Privy Council in Grant v Australian Knitting Mills Ltd [1936] AC 85, 101–102. An attempt to revive it was repelled by Lord Denning in Greene v Chelsea Borough Council [1954] 2 QB 127, 138. These cases establish that a person owes a duty of care even to persons who have no contractual relationship with him, and that his liability to an injured person depends upon whether the injury was caused by his act or omission. It is the nature of his act and omission that makes him liable. Thus a contractor who obstructed the normal approach to a house which he was engaged to reconstruct was held liable to a visitor of the house, when the latter was injured as a result of using a dangerous alternative access, despite the fact that the visitor had been informed of and appreciated the danger (see AC Billings & Sons Ltd v Riden [1958] AC 240). The duty cast upon the contractor in this case was not derived from the contract between him and the owner of the house but one which is cast by law in that because of the danger created by him, he must take a reasonable care to ensure that visitors were not exposed to it. (Emphasis added.)



The importance of the decision of the Federal Court in Lembaga Kemajuan Tanah Persekutuan v Mariam lies in the acceptance in Malaysia of the proposition that Donoghue v Stevenson has had an overriding effect upon cases that preceded it where courts insisted upon a pre-existing contractual relationship in order for a duty of care to arise. Cavalier v Pope is one such case. Accordingly, it is in our view irrelevant that the courts in England regard Cavalier v Pope as being unaffected by the Delphic pronouncement of Lord Atkin in Donoghue. See, for example, Travers v Gloucester Corporation [1947] 1 KB 71, a case cited by learned counsel for the second defendant. It is entirely up to our courts to develop our common law jurisprudence according to the needs of our local circumstances. The Privy Council accepts this to be in keeping with the common law tradition. So, in Invercargill City Council v Hamlin [1996] 1 All ER 756, Lord Lloyd Berwick said at p 764:



But in the present case, the judges in the New Zealand Court of Appeal were consciously departing from English case law on the ground that conditions in New Zealand are different. Were they entitled to do so? The answer must surely be ‘Yes’. The ability of the common law to adapt itself to the differing circumstances of the countries in which it has taken root is not a weakness, but one of its great strengths. Were it not so, the common law would not have flourished as it has, with all the common law countries learning from each other.



The approach of our courts to the development of our common law is to be found in the judgment of Hashim Yeop A Sani CJ (Malaya) delivered in the Supreme Court case of Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 where he said at p 361:



Section 3 of the Civil Law Act 1956 directs the courts to apply the common law of England only in so far as the circumstances permit and save where no provision has been made by statute law. The development of the common law after 7 April 1956 (for the States of Malaya) is entirely in the hands of the courts of this country.



Following the jurisprudence encapsulated in Lembaga Kemajuan Tanah Persekutuan v Mariam, in our judgment, a landlord of premises stands in sufficiently close proximity to the lawful visitors of his tenant. And the latter is certainly someone whom the former ought to have in his contemplation when letting out his building. In short, the relationship under discussion falls squarely within the Atkinian formula. We take this opportunity to point out that our decision is entirely in keeping with the common law philosophy in relation to the tort of negligence. That philosophy was expressed by Brennan J in Sutherland Shire Council v Heyman [1985] 157 CLR 424 at p 481:



It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable considerations which ought to negative, or to reduce or limit the scope of the duty.



For the foregoing reasons, we hold that in accordance with our common law, a landlord of premises owes a duty of care to the lawful visitors of his tenant.

The nature, scope and extent of the duty

As for the nature and scope of the duty owed by a landlord to the lawful visitors of his tenant, we refer to two passages in the joint judgment of Gummow and Hayne JJ in the Australian High Court in Jones v Bartlett [2000] HCA 56. In the first passage, their Honours when dealing with the nature of the duty of care owed by a landlord to his tenant said:



The relationship between landlord and tenant is so close and direct that the landlord is obliged to take reasonable care that the tenant not suffer injury. In considering the degree of care which must be taken, and the means by which a tenant may be injured, it must be borne in mind, as already discussed, that ordinarily the landlord will surrender occupation of the premises to the tenant. Thus, the content of any duty is likely to be less than that owed by an owner-occupier who retains the ability to direct what is done upon, with and to the premises. Broadly, the content of the landlord’s duty to the tenant will be conterminous with a requirement that the premises be reasonably fit for the purposes for which they are let, namely habitation as a domestic residence. (Emphasis added.)



In the second passage they said:



[D]angerous defects are unlikely to discriminate between tenants and those on the premises whether as an incident of a familial or other personal relationship, as in this case, Cavalier v Pope, and Northern Sandblasting, [the reference here is to Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313] or some other social or business relationship or occasion. The landlord’s duty to take reasonable care that the premises contained no dangerous defects, owed in the sense earlier described to the tenants, extends to those other entrants we have identified.

Nevertheless, the duty of the landlord owed to these third parties, in many cases, will be narrower than that owed to them by an occupier such as a tenant. An example of facts not involving the placing of a duty on the landlord is a slippery floor; an unsecured gate to a fenced swimming pool may be another. The duty of care of the landlord to the third party is only attracted by the presence of dangerous defects in the sense identified earlier in these reasons. These involve dangers arising not merely from occupation and possession of premises, but from the letting out of premises as safe for purposes for which they were not safe. What must be involved is a dangerous defect of which the landlord knew or ought to have known.’ (Emphasis added.)



To summarize, the duty owed by a landlord to the lawful visitors of his tenant is to ensure that the premises that are let out are safe for the purposes for which they are meant to be used and the defect complained of by the entrant must be a defect of which the landlord had knowledge or means of knowledge. This then is the nature, scope and extent of the duty in question.

We now turn to deal with the present appeal.

The present appeal

Learned counsel for the second defendant has argued against the imposition of any duty of care on his client in the circumstances of the present case. He says that his client, unlike the statutory body in Lembaga Kemajuan Tanah Persekutuan v Mariam, was a bare landlord in the sense that it was not engaged in any positive act on the premises that produced the harm suffered by the plaintiffs.

This is no doubt an important argument. For, as a matter of policy the law governing the tort of negligence does not, as a general rule, impose liability for omissions.

But a closer look at the principle reveals that it protects only pure omissions. It does not apply to a case where a defendant creates a danger, eg, by leaving an unlit vehicle on the highway. In such a case, the defendant would be under a duty to warn others of the danger he has created.

Learned counsel for the plaintiffs has drawn our attention to the evidence on record which clearly shows that the second defendant, despite being a local authority whose duty it is to enforce compliance of the Uniform Building By-Laws 1986 (‘the By-Laws’) did not comply with those very By-Laws when letting out the building in question to the first defendant. It is plain from the evidence that the second defendant did not take any steps to meet the requirements of the By-Laws particularly in respect of the availability of a safe exit for occupants in the event of a fire. That indeed was the finding of the sessions court. Add to this the fact that the second defendant was well aware that the building was to be used as a hostel to be occupied by young children. In these circumstances we agree with learned counsel for the plaintiffs that the second defendant was not a bare landlord. The second defendant did in fact expose the plaintiffs to the risk of injury by its failure to comply with the relevant By-Laws.

Like the manufacturer of the product in Donoghue, the second defendant here knew the purpose for which his property was to be used. Equally, it was well aware of the harm that would ensue to the children by reason of the absence or inadequacy of fire escape exits.

It follows that we are not, in the present instance, extending the law of negligence into a new field. We are not even making an incremental advance. All that is required of us here is a straightforward application of Donoghue v Stevenson. The ground for this is, as we have already said, established by Lembaga Kemajuan Tanah Persekutuan v Mariam. We therefore reject the submission of learned counsel for the second defendant.

For the foregoing reasons, we hold that the second defendant as the landlord of the premises in question did owe a duty of care to the lawful visitors of his tenant and was in breach of that duty.

Was the High Court right?

It is apparent for the reasons given thus far that we are unable to agree with the decision of the High Court. In our view, that court erred in important respects.

In the first place, it refused to apply AC Billings v Riden, apparently on the ground that it was a case decided after the coming into force of the Civil Law Act 1956. The High Court appears to have overlooked the decision of the Federal Court in Lembaga Kemajuan Tanah Persekutuan v Mariam, which applied AC Billings v Riden and was a decision that was plainly binding on it. Accordingly, in our respectful view, the High Court acted contrary to the doctrine of precedent.

Further, the High Court’s interpretation of the proviso to s 3 of the Civil Law Act 1956 does not accord with the interpretation given to that provision by the CJ (Malaya) in Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor. Again, the High Court overlooked this decision also plainly binding on it.

The local authority point

The High Court also reversed the sessions court on the ground that the second defendant in its capacity as a local authority did not owe a duty of care as a matter of law. This finding was attacked before us by counsel for the first defendant. We were referred to Stovin v Wise [1996] 3 All ER 801. The majority speeches in the House in that case support the second defendant here.

But our attention was drawn to the powerful dissent of Lords Nicholls of Birkenhead and Slynn of Hadley and we were invited to adopt these in preference to the views of the majority. We note that the courts of Australia have indeed done so. See, Pyrenees Shire Council v Day [1998] 151 ALR 147. The Supreme Court of India in Union of India v United India Assurance Co Ltd AIR 1998 SC 640, in a judgment delivered by that most learned and eminent judge Jagannadha Rao J, has also developed jurisprudence in keeping with the views of the minority in Stovin’s case.We have found the discussion of the cases and the argument addressed to us on the point to be of much interest. It is a point of law which our courts may have to resolve in some case in the future. But the present instance is not the case for this court to do that. The approach we have taken will render any views we express on the subject pure obiter. We therefore decline to enter upon this part of the case.

The apportionment of liability

The sessions court found the defendants equally liable. When opening the appeal, counsel for the first defendant argued that it is the second defendant which ought to be held solely liable. However, under pressure of argument, counsel retreated from his earlier position and conceded that the apportionment of liability inter se the defendants made by the sessions court should be restored.

Counsel was correct in the concession he made. Save in the rarest of cases — and the present instance is not such a case — an appellate court will not disturb the apportionment of liability for an accident made by the trial court. The High Court found the first defendant 100% liable. But it did so on a ground of law with which we do not agree. Accordingly, the apportionment by the sessions court must be restored.

The result

For the reasons already given, the appeal is allowed. The order of the High Court in all respects is set aside. The order of the sessions court is restored. The second defendant will pay all the costs of the plaintiffs and the first defendant at all levels except costs in the sessions court, that is to say, that the plaintiffs and the first defendant will tax their respective bills against the second defendant.

Before we conclude, we would like to thank all counsel for their careful argument. But we must make special mention of Mr Gurubachan Singh and Mr Thayalan who appeared for the second defendant and the plaintiffs respectively. The brevity of their argument and their citation of relevant cases has made our task far less burdensome.



Appeal allowed, order of the High Court set aside and order of the sessions court restored.



Reported by Andrew Christopher Simon