Background to Landmark Case Explained

In this day and age of business, where the profit motive is predominant and an entire philosophy and culture have been built around the concept that the customer is always right, it is useful for a producer or manufacturer to pause and consider the consequences of biting off more than it can chew, in the name of commercial success.

Lessons may be learnt from the case of Management Corporation Strata Title Plan 1166 v Chubb Singapore Pte Ltd [1999] 3 SLR 540. In 1985 Chubb Singapore (C-S) entered into an agreement with developers of a condominium housing project for the development, supply, installation and maintenance of a custom-built, videophone security system. The system allowed visitors to the condominium to call and talk to residents in their individual apartments in videophone mode. Residents were also able to communicate with the security guards at the guardhouse by the same system and see persons standing at lift lobbies through video camera signal.

The design of the system was subcontracted to C-S's sibling company in Hong Kong (C-HK). The system installed by C-S was plagued with problems from the outset and was the subject of many complaints by the management corporation (ie, the residents' executive committee). C-S itself was critical of the system designed by C-HK, protesting that it was dysfunctional, non-compliant with specifications, and possessed inherent faults and weaknesses.

The system broke down in 1991 and the management corporation thereafter commenced legal proceedings against C-S.

C-S made the following admission at trial: "The developers of the condominium had asked for too sophisticated a system and were allowed to have it, which was a mistake".

The trial judge's written judgment in the Chubb Case is a landmark decision on product liability law in Singapore. It is substantial in its holdings and reasoning, and discusses many areas of product liability law, including:

• whether a claimant may sue in contract or tort;
  
  
• the standards of duty and liability of a producer or manufacturer;
  
  
• implied conditions of merchantability;
  
  
• implied conditions of fitness for purpose;
  
  
• legitimate expectations as to life-span of a product;
  
  
• the definition of 'goods';
  
  
• the difference between a contract for work and materials, and a contract for the supply of goods and services;
  
  
• the possibility of hybrid contracts, agents and independent contractors;
  
  
• the use and value of admissions made by the producer or manufacturer;
  
  
• the doctrine of 'buyer beware';
  
  
• the necessity of giving notice of defects to the producer or manufacturer;
  
  
• latent defects; and
  
  
• compensation.

Subsequent updates will explore the areas covered by the judge in the Chubb Case, and will be discussed in the light of other developments in product liability law in Singapore.

For further information on this topic please contact Lawrence Teh at Rodyk & Davidson by telephone (+65 225 2626) or by fax (+65 225 1838) or by e-mail ([email protected]).