Daq Warehouse Sdn Bhd v Tang Lin Yau Sdn Bhd (BA-22NCvC-55-02/2024)

DAQ WAREHOUSE SDN BHD [No. Syarikat: 202101045114 (1445414-M)]

DAQ LOGISTICS SDN BHD [No. Syarikat : 201401048630 (1124819-K)]

DEEP SEA FISHERY KINGDOM SDN BHD [No. Syarikat: 210201044794 (1029271-X)] … PLAINTIF-PLAINTIF

TANG LIN YAU SDN BHD [No. Syarikat: 197701003860 (34878-X)]

ECOLD REFRIGERATION SDN BHD [No. Syarikat: 201801028777 (1290803-H)

TAN YOW BOON (No. K/P: 740623-08-5981) … DEFENDAN-DEFENDAN DAN 21/04/2025 10:53:22 BA-22NCvC-55-02/2024 Kand. 71 BASIC FRONTIER SDN BHD [No. Syarikat: 199301009300 (264037-V)] … PIHAK KETIGA GROUNDS OF JUDGMENT Introduction [1]

Whether the 1st Defendant has a duty of care to the Plaintiff to ensure that the water valve is turned on for the operation of the firefighting system

Whether the Third Party is liable to indemnify the 1st Defendant if the 1st Defendant is found liable for the fire damage to the Property Analysis and findings 1st Defendant’s duty of care [6] The question of whether the 1st Defendant has a duty of care to the Plaintiff to ensure that the water valve is turned on for the operation of the firefighting system, is premised on discovering whether the 1st Defendant has indeed relinquished all duty of care on execution of the SPA and Assignment as it contends, such that any duty of care to the Plaintiff is owed by the Third Party alone. [7] The Third Party contends that the 1st Defendant not only retains a duty of care in respect of the firefighting system to ensure that the water valve is turned on for the operation of the firefighting system, but that the duty of care rests solely with the 1st Defendant. [8] It is undisputed that the valve is in a public space and the Property is not part of a strata development. According to the 1st Defendant, there is no common property being maintained by the 1st Defendant and so there is no other law that provides for the 1st Defendant’s continuing obligations to the Plaintiff. The Third Party claims that there is a continuing duty of care owed to the Plaintiff by reason of the 1st Defendant’s contractual undertaking under the SPA. [9] Under Other Conditions in Clause 29 of the SPA which is to be construed as an essential part of the SPA, Item 11(6) of the First Schedule to the SPA provides that: “The Vendor is also providing a central fire fighting system to the units forming part of the development being a BOMBA requirement which system will be managed by the Vendor (or such other person(s), company or assignee as the Vendor shall appoint or assign to at any time and from time to time) whereby the Vendor (or such other person(s), company or assignee as the Vendor shall appoint or assign) shall set an amount to be payable on a monthly or other periodic basis for the operations, maintenance, upkeep and repair of the said central fire fighting system (which includes that of the sprinkler/water consumption charges, main water hydrant/tank and sprinklers) which amount shall be calculated based upon the cost and expense of carrying out such operations, maintenance, upkeep and repair multiplied by the built-up area of the said Property over the built-up area of all the twelve (12) units of factories cum office comprised in the 2 blocks of 6 contiguous units in the development which sums will be payable by the Purchaser to the Vendor (or such other person(s), company or assignee as the Vendor shall appoint or assign to at any time and from time to time) as the Purchaser’s contribution to the operations, maintenance, upkeep and repair of the said central fire fighting system.” [10] The 1st Defendant argues that the above clause does not impose upon it any responsibility for parts of the central firefighting system that it has no exclusive control over and further, that it had not started charging the owners any fees as envisaged by the said clause at the time of the fire. [11] This Court interprets the central firefighting system to mean the entire system from end-to-end because it is clearly a communal safety system. It is not defined, but “includes” the sprinkler/water consumption charges, main water hydrant/tank and sprinklers. The use of the word “includes” means it is not exhaustively limited to water charges, main water hydrant/tank and sprinklers. [12] If Item 11(6) of the First Schedule to the SPA meant to exclude areas outside the exclusive control of the 1st Defendant as part of the central firefighting system for which it is responsible, then the clause would have excluded the sprinklers which sit within the Property, but it does not. By extension therefore, it includes every part of the system from the main pump and tanks, to the pipes and valves and to the sprinklers. Even if there is a broken sprinkler within the Property, the 1st Defendant would be obliged to undertake repairs. [13] On an objective interpretation of Item 11(6) of the First Schedule to the SPA, this Court finds that the operation of the central firefighting system must refer to all acts necessary to ensure that it is operating as intended at all times. As part of that obligation, the 1st Defendant must, for example, conduct routine inspection and maintenance of the system. The location of the valve in a public space means that the 1st Defendant also has access to it and it should accordingly be the 1st Defendant’s responsibility to secure it. This is not unreasonable seeing that it is responsible for water charges. [14] In conclusion, the 1st Defendant does owe a duty of care to the Plaintiff to ensure that the water valve is turned on for the proper operation of the central firefighting system. Indemnity and contribution [15] The Assignment of the Tenancy Agreement cannot and does not assign the 1st Defendant’s obligations under Item 11(6) of the First Schedule to the SPA (reproduced in the recital to the Tenancy Agreement) to the Third Party. Notwithstanding this, the 1st Defendant contends that the Third Party’s liability to indemnify the Defendant arises due to Clause 4 of the Assignment which provides: “The Assignee [Third Party] shall at all times hereafter save harmless and keep the Assignor [1st Defendant] indemnified against all actions, proceedings, claims, demands, penalties, costs and expenses which may be brought or made against or incurred by the Assignor, by reason or on account of the non-observance by the Assignee of all or any of the stipulations on the part of the Assignor contained in the Tenancy Agreement attributable to the said Property or otherwise howsoever as from the Effective Date.” [16] On a plain reading of the above indemnity clause, it only operates if there is non-observance by the Third Party of all or any of the stipulations on the part of 1st Defendant contained in the Tenancy Agreement that results in the 1st Defendant’s exposure to liability and damages from the fire at the Property. As highlighted, the obligation to provide, operate, maintain, upkeep and repair the central firefighting system was never transferred to the Third Party and always remained the obligation of the 1st Defendant. [17] Of course, the fact that the 1st Defendant has a duty of care to the Plaintiff does not completely absolve the Third Party from any possible contributory liability in tort for the failure of the central firefighting system. In this case however, there are no particulars pleaded as to how Third Party was contributorily negligent for the valve, which is determined to be the responsibility of 1st Defendant, being turned off. That being the case, this Court finds no pleaded case for contribution. Conclusion [18] Based on the above analysis and findings, the 1st Defendant’s third-party claim against the Third Party for indemnity and contribution is obviously unsustainable and is accordingly struck out with costs of RM5,000.00. Bertarikh : 21 April 2025 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Defendan Pertama: Nur Syahirah Mohamad Taib, Messrs B H Gan Nor & Kim Untuk Pihak Ketiga: Harjinder Kaur (with Toh Xin Yi),